I understand then that there are two problems here--1) calculation of fatigue life in a non uniform stress field--such a calculation normally requires the estimation of some stress parameter such as von Mises stress, and 2) calculation of the required 'stress parameter' at the weld toe.
Since the first problem is company specific (that is, there are many ways to estimate fatigue life of a structure--crack initiation and crack propagation come to mind, though each method has many possible variations and fudge factors associated with it), I will address the 2nd problem only.
Since this appears to be the problem of a singularity at the weld toe, doesn't 'extrapolating back to the weld toe' give you the same result as 'extrapolating back to the crack tip'? In other words, garbage. The only question is the singularity's strength. A crack tip is a numerical singularity--the exact solution is infinite stress at the crack tip. Within Linear Elasticity theory, Williams described the stress field as one proportional to a constant, the Stress Intensity Factor KI and the inverse of the square root of the distance relative to the crack tip--at the crack tip, the stress goes to infinity. Since Therefore, any calculation (with FEM, BEM, etc.) of the 'stress' at the crack tip will be meaningless.
It is possible though with experimental correlation to make some average stress computation with linear elasticity models in FEM/BEM in the neighborhood singularity. Sure would love to see how someone does that, though! Perhaps this Battelle software does just that.