One of the machinists I used to work with always said, "it isn't a mistake if you can repair it before the boss sees it". That was right after he bored a 2" hole .250" out of position. No problem, he just turned a 2" plug, pressed it in the hole, and had the welder weld it in place from both sides. He milled the part back to the original thickness and rebored the hole in the proper place. You couldn't tell there had ever been a misplaced hole.OIL, OIL, OIL.
Salvage the part by cutting a legit groove where thee tool seized. Sometimes success is just a well-disguised screw-up.
That reminds me that I did wear a groove in some knurl shafts that I made out of 0-1 steel that I hardened.I have carbide shafts in mine