Not a frame builder myself, but also not wanting to give upon an otherwise nice frame, I would go with the suggestions above: totally grind off the top lug / binder and fabricate or buy a longer lug/binder which covers the crack entirely.
Can one re-braze the longer lug on there?

oh, if only i was a frame builder and knew what i was doing or talking about...
My Jamis 'Sputnik' suffered a very similar fate, but the crack/tear is much smaller and in a less crucial area of the seat tube,
so far i have just ignored it, but keeping an eye on it..