If you do decide to drill out the old cut off locating Peg, its usually fairly soft steel, just be aware that the hole is not drilled straight inwards in line with the shaft that you might expect but goes down into the shaft at an angle. I had to replace one once, I used a round nail found to be the right diameter as a new peg that was a good fit, cut off just proud of the shaft for locating the points cam onto it, If you can try and round off the end so it does not catch on the points seal on the primary chaincase cover.
Sometimes when fitting the Pazon electronic ignition system, you have to cut off the peg or certainly reduce it in length to be able to fit the Pazon cam, its possible that was done by someone else but you have ended up with the recon crankshaft.
With regard to the seal on your primary chaincase cover it looks to be the opposite way round to the normal way of fitting them, think the lip with the spring should be facing the oil in the chaincase, could be wrong but thought I would mention it in case you get oil coming out in use. Jess.