For both the top and bottom of the headtube, 1/4 inch of the frame was cut out, 3/8 inch put back.
The "collars" were spun on a lathe and notched out for the adjoining tubes. Fit so good, they almost didn't need welding. They were then faced for a standard 1&1/8 straight steerer and ought to be 100% compatible with modern forks.

Top:
headtube upper cup by Richard Mozzarella, on Flickr


Bottom:
headtube lower cup by Richard Mozzarella, on Flickr


Whole head tube:
headtube overall by Richard Mozzarella, on Flickr