Hello fellow smiths,
I would like your kind help for a problem that is bugging me. For a fastening system I want to use a slot punched hole in Round bar and a wedge to hold everything together. As I need to make a few (30+) and never made any I would like to get your experience what is best. The main problem is the minimal distortion in the bar because I want to get it through a 1/2 inch hole.

My ideas so far are:

1. Drilling most of it out and punch the rest hot

2. Forge the ends in a shallower half round swage, bend it over and faggot weld it to get a hole at the end.

3. Take thinner square stock and thin the hole section to compensate for the swell

 

I added a picture and hope it makes sense

As I see it, this one will require some machining.  If you hot punch the slot using normal techniques you will definitely get distortion of the parent stock.  If you try to then forge the punched section back to a 1/2" crossection "freehand", the slot will no longer be well suited for your wedge.  As you noted, you can reduce the distortion during punching by using a custom 1/2 round swage (bolster) with a slot set to accept the slug, but there will still be some distortion.  Actually putting a nominal 1/2" bar through a 1/2" hole without a punched slot doesn't leave a lot of clearance either (might want to consider a 17/32" hole at least...).

As for machining, it all depends on what you have for equipment.  Easiest would be to just mill the slot.  Alternate is to hot punch the slot with a custom bolster, forge back close to 1/2" crossection with a custom set of clapper dies and a slot mandrel in the slot, then grind or file the final exterior to shape.

Good luck, this will be a challenging project.

I don't have anything to add or disagree with the above. As you describe it will be a serious job of work however you approach it. 

In short I'd slit, drift and forge finish with a mandrel in closed dies.

Frosty The Lucky.

I'd like to add a suggestion: 

Take oversized bar, perhaps 5/8" round - if you have access to a press, power hammer or welder you can make this a lot easier: 

Draw out the middle section to 1/2" round. 

The ends are then turned into an octagon slightly larger than 1/2" round diameter, which is then slot punched through. Using a drift the size of the finished hole, forge the end back into alignment so that the swell is reduced. 

Then, grind the octagon to round so that it fits through the holes. The rectangular slot will be preserved, and you will now be able to wedge it tight.