Use the mill. The two vertical indexing flats will work well for aligning your barrel. I ended up using an .050" plate pocketed out to an 'I' shape to properly clock the barrel (total place size was only .500"x.750"x.050", it doesn't take much), then parallels to ensure the X-axis was level.
Once that is taken care of, it's very easy to find your dimensions and enlarge the window to your needs. Take it slow, and go with 3/16" or smaller on the end mill, carbide if you'll be working on stainless.
I'm assuming you know your way around a mill, let me know if you need anything else.
EDIT: Don't worry about the vise distorting the barrel, just snug it down, keep the window close to the jaws, your end mill size small, and you won't have to worry about anything.
Once that is taken care of, it's very easy to find your dimensions and enlarge the window to your needs. Take it slow, and go with 3/16" or smaller on the end mill, carbide if you'll be working on stainless.
I'm assuming you know your way around a mill, let me know if you need anything else.
EDIT: Don't worry about the vise distorting the barrel, just snug it down, keep the window close to the jaws, your end mill size small, and you won't have to worry about anything.