cutting barrel
Your best bet would be to take it to a gunsmith, and it would be a lot cheaper. If you buy the tools you mention, you are going to have a lot of expensive tools left over, for a one time job.
However, you can do it yourself IF YOU HAVE THE KNOWLEDGE, SKILL, AND CAN EXERCISE REASONABLE CARE.
First of all, you need to put a witness mark back on the barrel where the dovetail will be. Since your rear sight and front sight should have dovetails, put a steel edged ruler or straight piece of steel toughing the sides of each. Then scribe a line where you want the new sight.
Wrap some tape around the barrel, with the front edge where the cut will be. IMPORTANT - PUT A CLEANING PATCH INSIDE THE BARREL ABOUT 2 INCHES BELOW THE PROPOSED CUT. THIS WILL CATCH METAL FILINGS.
Use a very fine (32 tooth or more) hacksaw blade and cut the barrel. Use a small square and a file to get a 90 degree front end on the muzzle, and to smooth out the hacksaw cuts. Then chamfer the edges of the barrel slightly to round them off.
You can buy fine grit round stones at a hardware or automobile parts store. Mount one in a slow speed hand drill or set the drill on a VERY SLOW SPEED. Use the stone to make a slight crown in the barrel, and do not press heavy and try to take out too much metal. While doing this, do not keep the drill stationary, but rotate it up, down, left, right, and points in between. Just keep the drill at the slow speed, and moving around a bit.
When you have a slight crown, you can then use a brass round head screw and valve grinding compound to polish it a bit.
The sight dovetail can be marked out. Make some undersized short cuts with the hacksaw, with the ends at the proper angle and vertical cuts in between. Do not cut too deeply. Next, take a 3 corner file, and "safety" it by grinding two of the sides. Carefully file out the slot to give a tight fit to the sight.
If you have access to a metal lathe, the job is much simpler. Cut the barrel, chuck it so that the barrel runs true in the lathe, and face it and chamfer the outside corner. You can then put an 11 degree crown on it, or a recessed crown, about 1/8 back from the face. You can also grind a tool bit to give a rounded crown, but it is more work.
Remove the patch from the barrel, and clean the barrel.
Again, depending upon your skill, a gunsmith might be a better option.
Something else to consider is to counterbore your rifle. 4 1/2 inches is a fair distance, but many of the Finnish Mosin-Nagant rifles have been counterbored and shoot quite well. I have one with a noticeable bulge about 3 1/2 inches from the muzzle, probably from being plugged with snow then fired. I wouldn/t be surprised if this is not what happened to your rifle.
For a .30 calibre barrel or under, you will need a long 3/8 inch drill bit, and also a long 3/8 inch reamer with a flat face. Put the drill bit up against the barrel so that it extends slightly back, (about 1/2 inch), past where the bulge is, and put a small piece of masking tape on the drill bit to mark the depth. Drill the end of the barrel until the tape touches the muzzle. Then chuck the 3/8 inch flat face reamer into the drill, and SLOWLY, WITH LOTS OF OIL OR CUTTING LUBRICANT, advance the drill slightly so that it cuts a flat face inside the barrel. NOTE - I usually use the lathe for this.
Good luck.
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