Case 580c timing cover water leak?

My dad and I are repairing a 1980's Case 580c backhoe tractor with a 107D engine. The problem we are having is the timing cover water jacket, where the water pump housing slips into the timing cover wont seal. It looks like the hole on the timing cover is pitted and won't seal the O-ring. What are my repair options? Not sure where to go from here. Sleeve the cover, turn a bigger nipple for the housing, new cover, JBweld? Any direction would be appreciated. Thank you.