Kevin/Bill, according to my prints of the Spring Hanger, it was actually started as a L.C. cold-rolled wire (0.565" diameter) and received a cyanide quench when it was finish machined, but I doubt the heat treating did anything for the overall strength, -but more for the wear surfaces. If I was concerned, I could do a quick Kansenit at the end.
Bill, I have a Bridgeport #2 boring head for my mill (which is what I think you are calling a flycutter), but the issue for me is trying to figure out how to fixture it rigidly. If someone has some ideas, I sure would like to listen! If I can get past that part, I think I can use a coaxial indicator to sweep it in but again, just not sure I can clamp it solidly enough. Ironically I have been playing with a shackle for the last hour or so, and I have kinda gravitated towards using the lathe and spin it between centers using the grease fitting hole and the pilot hole near the threaded end. My obstacle right now is I do not have a #3 MT dead center, and my live centers are all too big in diameter to get a cutter bar in there. I would like to find a dead center that was an extended length that could be ground down on the end to gain clearance. Then what I am thinking about is trying to make a 'L' shaped tool with a small insert that I can go in on the right side by the tail stock and miss the other side of the shackle as it spins. The finished distance between the two shafts is only .9375" (15/16), and so to have any rigidity, I probably need to make a .750" (3/4) tool bar, ...which ain't much room for error or weld!
Rod/Aaron, I'm sure you can already see how this likely won't be practical for the average hobbyist to afford. I suspect what you will see is the modern-style aftermarket type shackle (which is still available) being sold/used on most future restorations unless the original looking ones come back into production.