I have crowned many barrels for gunsmiths over the years as a contract machinist. In my opinion, to do it correctly takes a lathe that's setup for barrel work, and a truly knowledgeable operator.
Having said that, I have seen very serviceable crowns done by hand with piloted cutters. They do require meticulous work habits though, and prefereably a constant flow of cutting fluid through the bore to instantly clear the chips. (If chips are not constantly flushed they will work themselves between the pilot and bore and scratch the lands.)
Cold blue is very suitable for finishing the newly cut muzzle, and if applied properly, should last the life of a rifle that receives nominal care.
The way I CUT the barrel is with a band saw, leaving the barrel approximately .1" longer than the desired finished length. It's a rough cut, and not square, but very fast. I used to part them off in the lathe but it took a long time and if the parting tool jammed, the barrel could be severely marred.
The way I CROWN the barrel is in my lathe, using barrel-specific tooling. I square the crown to the last six inches of bore, ignoring the chamber. Every barrel I've worked on has had a bore that was "jump rope" shaped -- if the chamber end and muzzle end are set concentric to the lathe spindle, the center of the bore length will have significant runout.
Squaring the crown in this way requires a range rod and very precisely-fitted bushings. I use a pair of 0.0001" test indicators and it takes about 90 minutes to set up the barrel in this way.
The actual cutting of the crown only takes a minute, plus another 10-15 to double check the work (e.g., barrel may have shifted during the cut). If the customer wants the muzzle threaded I do it at this time, and then later use a piece of the cut-off to make a thread protector.
To BLUE the now-exposed metal I wash with soap and water (to clear the oil and any remaining chips), degrease the portion to be blued, and mask the rest. I have gotten better results by heating the metal with a heat gun before applying the blue. It goes on darker with more even coverage, but I can't say it's more durable. The masking is to prevent the cold blue from getting on the original blue, because it causes the original blue to discolor or dull.
The instant the cold blue is applied I remove the masking and wash again in hot soapy water to deactivate the cold blue. This is an important step! Cold blue is very acidic.
Then I'll "kiss" the bore with a 60-degree countersink to remove that last tiny burr. This removes a bit of the cold-blued area and leaves a tiny silver ring. This is my final check to ensure a quality job, and a way for the customer to verify it too. If the muzzle is even slightly out of square with the crown, the ring will not be perfect.
In my experience, shot precision is much better with shorter barrels, so as long as the crowning job is meticulous you shouldn't be losing anything except some muzzle velocity.
ETA: On the $75 price estimates -- I live in the Los Angeles area so I have to charge more... you know... cost of living!
