##You must trust your DM quite a bit!
You must trust your DM quite a bit!
Which is good. I don't know that I could do the same, to be quite frank.
To answer the question, I think we're going to have to parse out the language, and I think the result will be something of a blend between your 2nd and 3rd bullets. I will hedge my bets here and say that this is an interpretation of this particular DM's method, so there very well may be a better answer.
##The ability says "after seeing the roll", not "after seeing the result of the roll".
The ability says "after seeing the roll", not "after seeing the result of the roll".
As such, the inspired PC only needs to know that they are being attacked. The DM has to give the inspired PC the opportunity to implement this mechanic, so s/he should give the PC an indication that one or more attacks have been made against them.
But, because your group has agreed to this particular method of attack rolls made by the DM, you're going to have to guess whether the DM's attack roll hit you by a bunch, or just by a couple. There's nothing that states specifically that you have to see the number on the die since the wording reads "before knowing whether the attack hits or misses."
##You're going to want to clear this up with your DM sooner rather than later.
You're going to want to clear this up with your DM sooner rather than later.
Especially considering there are other abilities, spells, and magic items that create a similar effect. Off the top of my head, the shield spell works much the same way (and that would be at the cost of a spell slot, so potentially a significant gamble).