Hrmm, it is a tough but enviable position you are in. I think that the bike looks to be in very very good shape except for that one small area. Were it me, I would file it down as best as I could and spray a little Rustoleum on it and cover it with blue paint and use a screw-on cable guide. Another option might be to take a torch to it and pop it off which would be cleaner in the end but you would probably lose the decals.