Internal O-ring

[Metals and materials]

I have got into interesting situation. We have a conical part with bushing pressed on top. Whoever, pressed the bushing did a bad job on it. The bushings are not at 100 percent centre of the part. In other words, the indicator when indicating zero gives 0.025 inches difference. we have about 10 parts And it is different for all. We have to make an O-ring at the centre of the bushing, like undercutting using key-seat cutters. 

Because it is little crocked on one side. my key set cutter broke. I am thinking to reduce the feeds and speeds and reducing depth of cut, but what else could be done? 

Thank you in advance for giving me solutions. I am new but, I am learning every day. 

[crazy^millman]

Try to find a smaller tool that will still reach what you need?

[Aaron Eberhard]

Instead of doing a single pass, make either concentric passes with the most amount of engagement you want (Knowing you'll cut air on one half), or do a spiral towards it.

[#Rekd™]

If it is rubbing the shank you could grind it down by hand to create more clearance.