On a 261 I did last year, the seal surface was pitted , however The crank journals were in unusually fine shape. The machinist took a some off the seal area but some deeper pits remained.He didn't want to reduce the diameter too much.When I assembled the engine, I used a NOS rope seal.No leakage at all after a summer of use.My crank wasn't like the surface of the moon, but it had enough pits in it that a lip seal would have leaked .I guess its a judgement call if it won't clean up to well to go with or weld, replace, or whatever.
