Dremel it carefully; use a cold chisel to split it when close to cut through; be certain to not cut into the spindle; and then emery cloth the burr that'll be left.

Be DAMN sure to pack that bearing!!!!

(If you missed the bearing itself, I'd bet you missed packing them ... )

I use a packer with my grease gun ... something like https://smile.amazon.com/Lisle-65250...dp/B0002NYDYY/ will do the job fine. DO wear gloves; that stuff's nasty in the skin if you use the moly lube (which is my choice.)

The methodogy is the same 1987 to 1996 - pull down either the 1995 or 1996 factory service manual from the FAQ message in the stickies, and read up on how to torque the bearings properly.

 

That's a pretty serious divot. Think I would replace it.......

 

If it was closer to the knuckle, I would replace it. However, there isn't as much stress from lateral forces at the outer end. Now, if the cut was across the spindle than along it, it would be different and need replacement. As it is unless you're going mudding, I wouldn't worry about it.