Since the problem occured during step 4, another method would be to change step 4 to lightly grind the weld from the OD side to uniform sound metal and then back weld with the FCAW process in approximately 12" long increments using a backstep technique and alternating 180 degrees from pass to pass about the circumference; i.e, start first segment at 12:00, second segment at 6:00, third segment to tie-in to the first segment and so on.
The primary cause of the problem is the high volume of deposited weld metal in the last pass coupled with high heat input using the SAW process in a single continuous pass. Accomodation for growth about the circumference was not provided as well as the effects of the volumetric weld shrinkage. The 1/8" land was worse because, after backgouging, a greater volume of weld metal was deposited with the single pass. It would also be interesting to know what the depth of penetration and profile (narrow or wide)of the final bead.