I cant see how that works, can you explain what the grub screws lock on to. As far as replacing it goes, look at a replacement euro BMX bb, you may be able to use the cup from one of them.

edit - I get it now. I would look for a cone nut from an oversize 14mm bmx hub. some of these come with grub screws. You'll need to drill it out for sure, and it's almost certainly wider than that collar. but you may be ok.