So I am replacing a .108 blade on a model 67 because of damage, all I have on hand is a .126 How much difference will this be in elevation? Will it work?

Assuming it was sighted in before, if you have .020 or more between the bottom of the rear sight and the frame where it seats, it will probably work. You can use a set of feeler gages to measure the gap.

Although the rear sight blade will fit the rear sight assembly, by using the incorrect, higher blade, you will loose the ability to adjust the point of impact properly.

Midway shows them in stock here: Smith & Wesson Rear Sight Blade .106 Black K L N-Frame

You can still back order the proper blade at Brownells.

SMITH & WESSON SIGHT BLADE, .106', BLACK, BBLS LONGER THAN 5" | Brownells

You might also contact S&W Customer Service for assistance. They may have the .108" blade you need in stock. 1-800-331-0852

If the part is out of production, and you are unable to find one online let me know. I have one blade left in my parts bin that is the size you need.

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Ret. LE, FA Instr, S&W Armorer