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To cut down the head tube I'd use a pipe cutter. You can pick these up at Home Depot. It'll make a nice straight cut. Only thing is the tool might mess up the paint a bit.
You want your upper and lower bearing races to be parallel so if you hack the top of the tube and it's not a straight cut then your steering isn't going to be as smooth.
Any bike shop that's worth a damn should have tools to ream the head tube and surface it so the bearing races will sit right.
What I would do is get out the trusty torch and heat that top bracket and bend it down so the bolt will go into it.
You want your upper and lower bearing races to be parallel so if you hack the top of the tube and it's not a straight cut then your steering isn't going to be as smooth.
Any bike shop that's worth a damn should have tools to ream the head tube and surface it so the bearing races will sit right.
What I would do is get out the trusty torch and heat that top bracket and bend it down so the bolt will go into it.