How to "un-strangle" a seat tube?

I would just use a shim and cover it.

On a side note, I wonder if you could use a brass instrument repair kit for this. It's for a trumpet or trombone that's been dented and it's basically a steel ball that you put in the tube and a really strong magnet on the outside of the tubing and you essentially roll the tubing back to round with the ball inside.
 
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