I don't think a carbide bit will touch it.
Sprockets are hardened, real hard. A file will not leave a mark on them.
Plus it has a keyway in the taper, so trying to bore a hole in tough/hard steel with an interrupted cut, sounds like it would be chatter city on my old Drummond lathe. (It is older than the bike!) And you know what carbide is like re impact on odd shapes etc, tends to get chipped at the cutting edge.
Of course, I could heat the sprocket up with the oxy and normalize/anneal it with slow cooling, but not knowing the makeup of the steel, or even whether it is case hardened or quenched, it would be pretty dodgy trying to reharden it without going too brittle or too soft. That is why I was thinking of grinding it, that plus the finer surface finish you get.
The new sprocket taper is correct size at the small (outer) end but is .031" undersize on the large end of the tapered hole.
As it is, the sprocket will only go about halfway on to the shaft before the undersize large end of the hole hangs up on the shaft taper. So there is too much metal still in the large end of the hole.
So I need to remove about .030" inches (diameter) of metal from the larger end of the hole, then it will slide right on to the correct position.
Still waiting to hear back from both my suppliers about this latest pair of dud sprockets.