I think I would talk to a frame builder and ask about a repair to the damaged steel section. It hasn't gone through the steel at this point, so It may be possible to add a braze filet to the damage. Or even a weld and grind to repair the tube. If it were mine I would lean toward the braze fill to do the repair. It may cost close to a couple of hundred dollars but would save your frame. Ask some of the frame builders here on BF. Just my thoughts, MH