I decided to elaborate. If I just spent a couple thousand dollars on a new lathe and it didn't pass a 1" bar through the spindle as it is specified to do, I don't think I would accept being told to bore it out.
In order for PM to say it has a 1" spindle bore, it is understood that it will allow a 1" rod to pass. That means the actual spindle bore must be larger than 1". The only way a 1" bar will not pass is if the spindle bore is exactly 1" ID or smaller or if the test bar is significantly larger than 1" or if the bar is not straight. Personally, I would confirm the OD of the bar and put it in V-blocks to confirm it is straight. Then I would call Matt himself and discuss options with him but boring or honing it out is not reasonable on a new machine.
And as an aside, I would not use drill rod for alignment. I would use Thomson linear shafting. It is case hardened, round, consistent in size and is straight. Drill rod has too many variables, straightness being an important one.