Is that Reynolds 853 steel, or something else?
I'm having troubles orienting your photo. How far down is the pinch in the seattube?
If the flaw is down in the middle of the seattube, you could probably just fill it and paint over. Possibly find something to press it back out, but not necessarily. Silver Braze?
If the flaw is near the top, then you'll have troubles with your seatpost unless you can actually get the tube pushed back round before repairing.