+1 for 2-p. Good discussion.
When steel is stressed beyond its elastic limit (the point of permanent deformation), it will suddenly yield slightly and then require an increased stress for further yield. This is called work hardening and is easily demonstrated by "bending" a coat hanger wire repeatedly. The wire will not continue to bend at the original location unless forced to do so. That is, the metal at the original bend has become harder/stronger and causes the bend point to move up/down the wire length.
If the bulge/dent is of modest size and has not exceeded the local metal's ultimate stress (the point where the metal suffers a fracture), it is usually possible to work the metal more or less back into place. Anyone undertaking b ulge/dent work should have a good knowledge practical metalurgy.
I would expect that only a severe dent could act as a bulge causing obstruction. The obstruction must be of a size and/or mass to create a gas hammer which then creates a bulge.
There are a lot of factors involved in a barrel burst. All steel is not created equal, barrels are not made equal, and barrels do not have a single common stress history. Thus said, it is not really practical to write a simple set of instructions for do/don't work on bulges/dents.
DDA