I have done this "mod" to over a dozen SKS rifles.
There has never been an issue with function by removing 1.5" of barrel. I could see there being an issue if the barrel was shortened to 16"...
If you actually want to cut it down to 18.6", the cut in the barrel will be under the FSB/Bayo-Lug sleeve. So you'll have to figure out how much you actually wanna loose and if you actually want a bayonet attached to the rifle....
I have always removed the FSB/Bayo Sleeve, and cut it halfway between the bayonet and FSB. This will allow you to re-attach the FSB to the barrel after you cut and crown it. There is a shoulder in the barrel that the FSB sleeve can use as a rear stop.
The barrel is pinned to the action, so you wont be able to remove the barrel from the action to cut/crown. So you'll likely cut it with a hand tool (hacksaw) or an abrasive wheel saw. Brownelles sells a hand tool Crown cutter which cuts 11 or 45 degree crown. You will need to order the brass guide(s) with the tool to match your bore diameter.
To reattach the Front sight, I have always silver soldered the altered FSB where I want it, then drilled and installed the cross pin.
The cleaner/straighter you make your cuts, the better off you will be. I do not recommend using a "counter sink bit" like a previous poster did. If done properly, the mod really makes the SKS a handy little carbine. I have never had a customer come back and tell me their rifle shoots worse after the mod. I have found that the group size shrinks with mil-surp ammo.
Another "mod" that I used to do quite often was flush the magazine to the stock. The magazine only holds 5 rounds and allows one to carry the rifle at its natural balance point.