I'm no framebuilder, but I do have a bit of experience in the direction of the seat tube defect issue, and I don't think it's a problem that can't be fixed readily. Take a look at this thread of mine:
https://www.bikeforums.net/classic-v...nd-jubile.html

That frame came to me with a wad of paper towel shoved inside, which resulted in a couple rust-through holes about a quarter the way down from seatpost lug. A creative local framebuilder fabricated a sleeve from a piece of 28.6 downtube with a slit about 3 mm taken out of one side. He then cleaned out the seat tube (not enlarging the holes much) wrapped the sleeve around an undersized dowel, tied with thin wire to compress it, inserted it with epoxy into the seat tube, cutting each tie wire as it entered the seatpost hole. When cured, he reamed the interior of the reinforced area to 25.4 mm, and profiled the top of the reinforcement to match the top of the seat tube exactly (didn't even remove the paint on the lip).

You can see the damage on one of my Flickr sets:
https://www.flickr.com/photos/131757...7627154051334/

The fix added only about 35 g to the weight of the frame. It now requires a 25.4 mm seatpost rather than the original 26.6; but I'd say it's good as new.