Hi David, you're mostly right, but the correct repair doesn't involve any type of welding, or heating, etc.
What one does is cut a .020" shim, which is thick enough to stand the finishing torque and restore the correct indexing, (1/8" as you describe is about perfect). Then you cut the barrel flange back approx. .010" or so and then assemble with the shim in the normal way... best to all, til….lat'r....GT.....