Since it's Sunday and I'm making Dog Food, I've go some time before I go down into my shop. For discussion's sake I'll give you my opinion (unsolicited, but what the hell) as to what I'd do. It will not doubt stir controversy, and propel this thread along. I'm not a Gunsmith, merely an amateur restorer. It's similar to what I've done on another gun.
First, I'd file the pits and check for pit depth and a bulge. If there was sufficient barrels thickness in the pits and no bulge, I'd go get the pits filled by laser welding with an appropriate filler rod, then proof, (if it passes, that is if you want a Shooter)) prep and refinish. Even if the pits are really deep, it might be worth it to get them filled and give it a try. The pattern there will be FUBAR, but the gun will be usable. If a bulge was present, I'd slug the area and iron it out with a rawhide hammer after filing yet before laser filling. Metal becomes harder when cold-worked, not softer. Ironing out bulges in these old guns used to be common, and I see no reason not to do so as long as it is properly re-proofed.
Regards
Ken
Last edited by Ken61; 02/22/15 12:31 PM.