melonite is nothing but a fancy word for nitriding steel. The case can be anywhere from .005" to .050" deep. Usually Rockwells at 64rc. Yes you can cut it with some grades of carbide, but when your looking at sixty plus RC, your thinking about ceramic's in a heavyduty lathe. Forget hand reaming, as it just won't happen. I've cut a lot of nitrided steel in my life time, and it's kinda scary the first couple time you do it. Chips come off bright red even though they're in a coolant flood. Surface speeds need to be high, and you must really push the metal off fast. Think 1200 rpm to 2000 rpm @ about 10" per minute feed rate for starters. I've seen some steels want a feed rate closer to 24" a minute!
It takes a strong machining system (very rigid with very heavy bearings) just to cut it. I've cut it on Okuma CNC lathes, and it seems that about 1 in five times I ended up in a wreck. Leaving me to completely realigning turret and head stock (one of my least liked jobs!!)
I'd just consider the barrel junk, and start all over.
gary