Mark,
The fact is there are millions of bikes with a slot like this. Most with out a hole at the end. There's nothing wrong with this (unless you are a framebuilder, in which case you should consider it a major NO-NO). Even with a fillet brazed frame, I put a small circular reinforcment at the bottom of the slot. Why not? It's there for the same reason one should p ut a ring around the head tube of a fillet brazed frame.
No point in trying to fix a frame that has paint on it. But I've done ma ny jobs during a restoration where I fixed the situation by adding some metal on the back of the lug and reslotting it.
Brian Baylis La Mesa, CA The beauty of lugged steel frames is almost anything can be fixed, inclu ding the gears. ;-)
This issue had me racing down to the basement to survey my fleet. While reading the post, I was thinking, I've seen many bikes with the slot go ing into the seat tube. My survey revealed a mix. While I think it's b oth asthetically and structurally superior to have it end in the lug, I don't see a real problem if it goes into the tube below it, provided it not TOO far, and you do drill or round out the bottom to eliminate the s tress riser. After all, your putting this big thick piece of aluminum i n there to strengthen the area.
Mark Hoffman
Relaxed in balmy
New Britain, CT
USA