Chef,
I've had some limited sucess at restoring bulged revolver barrels. In your example of the bulge appearing just behind the rear sight, I think it is fixable. This works on the S&W low carbon steel pre-WWII barrels.
The technique is to insert an oiled, tightly fitted drill rod mandrel into the bore, heat to a dull red, and using a bronze or brass hammer, forge the bulge out. Drive the mandrel out using another smaller mandrel. The bore will be tighter than before, and lapping with a cast lead abrasive plug will remove the tightness. After polishing and rebluing, the worked on area is almost invisible! The before-and-after difference in accuracy can be amazing. Before "group" of 12"-14" tightened up to acceptable 3"-4" groups at 25 yards.
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