Joined: Feb 2012
Posts: 19,362
Likes: 5,503
From: Rochester, NY
Bikes: Stewart S&S coupled sport tourer, Stewart Sunday light, Stewart Commuting, Stewart Touring, Co Motion Tandem, Stewart 3-Spd, Stewart Track, Fuji Finest, Mongoose Tomac ATB, GT Bravado ATB, JCP Folder, Stewart 650B ATB
dabac's answer is pretty spot on. As the drop out's axle faces are pretty chewed up I'd vote for a replacement. Have a full assessment done on the rest of the frame's condition and consider how you'll want the paint to be dealt with before pulling the trigger for a repair. Andy.