So I just bought a Flite 100 yesterday which came with the seatpost but there's one small issue. The seatpost (which is 26.8 of course) doesn't fit well into the frame. Once it gets maybe an inch or two in, it needs to be forced into the frame--yes, I lubed it first. I did feel a small bulge when I ran my hand up the seat tube (not sure if from myself or the previous owner). In addition, there does seem to be corrosion partway down the seattube as per the pic below which leads me to believe it could be remnants of an unseized post, but I can't be sure since I can't get my finger down far enough. What would be the best course of action? A 26.6 seatpost?

That "bulge" you are feeling is the external tube butting. It is normal for that frame.

Get a long wire brush and clean out the seat tube. Grease the hole, not the pole.

I thought it was butting but I wasn't completely sure. You're a lifesaver as always Scrod.

Words to live by.

Alright so I finally got around to cleaning out the seat tube and it goes in much easier now, but it still gets to a certain point where it can't go down any further or I need to force it. I'm thinking of just chopping the post, any other options before I take to my saw?

Chopping down seat post, handlebars, etc. really isn't that hard. Just go get a threaded pipe cutter from any hardware store. Measure twice, cut once!

That being said I would find out ALL other options before cutting anything down.

Yeah I know chopping wouldn't be hard (I cut my own fork), but that's why I'm double checking here

I would just cut it down to fit. I mean, you can't even see the part you cut off and will not use that seatpost on any other bike. Just one suggestion; use a pipe cutter instead of a hacksaw to get a smoother and more even cut. Make sure you leave at least 3-1/2 inches (9 cm) inside the seat tube.

I would just cut it myself.

But.... you can use one of these. A brake cylinder hone. The three fingers are spring loaded so they automatically adjust to the tubes ID.

I've used one with great success to clean out burs and rusty jaggies.

Auto parts store.....~$15.00ish