Since the barrel is rounded, getting it plumb is the most critical part.
And that is why a knowledgeable smith or machinist seldom relies on their Mk I eyeball. Instead they set up jigging of some form that eliminates the risk of misalignment and ensures square cuts to a degree demanded by the tolerances suitable for a given job.
It's this knowledge of how to set up and test for alignment that limits the home handy type. But with some imagination and trial runs on a hunk of cold rolled mild steel bar to learn what works and what doesn't it's amazing what can be done with some pretty basic setups.
The key is to TRY with something expendable such as some 5/8" cold rolled bar in place of the barrel. With the trial runs on the expendable material you can test your alignment jigging and your cutting skills and results. And if you have a front sight you want to use you can even fine tune the cutting dimensions for a good first fit.
If you try this a MUST HAVE for fitting the sight is a safe edge triangle file to dress and adjust the barrel dovetail. You can make one from the triangle file found in a small jeweller's file set by simply grinding and stoning one of the faces flat and smooth.
Something to consider at least. If you're already familiar with metal work generally to where you feel confident about making the new rear sight insert it's not a HUGE step to cutting your own front end dovetail. At the risk of repeating myself the trick is to learn and test on cheap scrap first. And to come up with a jig for positioning the gun's frame and barrel true to the cutting.
One does not even need a mill for this. If you use some sort of side supports to aid in guiding the file you can cut a pretty good dovetail all by hand. In fact here's one by Larry Potterfield where he doesn't even use an jigging at all. Trusting his hands and skill to hold the file level enough;
http://www.youtube.com/watch?v=W60yBwzipKA
Myself? I don't think I'd trust me quite as much. Instead my "trick" would be to clamp the barrel in a padded vise or some other jig that clamps the barrel. I'd set this up so the barrel sticks up above by the desired amount for the dovetail depth. After double and quadruple checking squareness I'd then file the dovetail using the same tools as Larry but being careful to file only until I've kissed the guide material on both sides and gotten a flat center area. The safe edge triangle file would then undercut the dovetail wings and the new sight fitted as Larry showed.
I might even put in two pins into the side guides to act as a jig for cutting one wing nice and square. The other wing would be allowed to round out slightly by just a few thou until the sight starts in as Larry again showed. Once I had both sides like that I'd work out the high spot in the middle to attain a nice snug tap in fit. The nice thing with this is that if the one side is cut flat and square that the other slightly belied side is only used to provide retention. The flat wing provides alignment.
If all this has you nodding in understanding then try it on a some cheap bar stock. Try it a FEW times and if you find that it's not too bad to set up and cut a pretty straight dovetail then perhaps do your own work.
Alignment is key. But since this would not be a fixed sight it does mean that a SLIGHT error of up to perhaps 1 degree is not the end of the world since you can tap over the blade to adjust the windage. But with reasonable care and suitable checking and a good jig it should be easy to keep any error to well under one degree. But take nothing for granted. For example, if you're going to measure for square off the frame do not assume that it's a constant thickness from top to bottom or back to front. MEASURE it! And at the same time extend the barrel's axis back along the frame by measuring the diameter and using a spacer and measuring to the frame. Assume nothing is straight until you confirm it. Or note any variations and plan on shimming to take the variations into account.
Such things are part of Gun Smithing 101. But there's no reason a decent home metal worker cannot duplicate these steps and cut things like sight dovetails just fine.
