Bob, Sorry to hear of the plight, but having done my share of jury-rigged projects in my youth, I would toss my hands up and haul it off to be line-bored. Think about it, this is probably the last time in 30-years it will need this. Reaming sounds like a temporary job to me and I hate doing stuff twice+.
On bearing thickness, my opinion would be to go thinner rather than thicker, thus leaving less material to plastic-flow if that was it's wont at some point. However, if a bearing guy is saying 0.250" then I would go with him especially if he is selling both thicknesses -- and at around the same price. Theory is a start to a journey, experience is a legendary tale!
Man, that hurts to "think."