Well...that's not normal....
To be honest, that looks like someone machined the inside diameter of that arm, for some reason. Too shiny to be un-touched, imho.
Like Darryl, I think I would have to replace that arm, period. Either go with a complete t-arm set-up, or just the arm itself, assuming the rest of the hub/spindle/bearings are not messed up.
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Joel Adams
C3VR Lifetime Member #56
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"Money can't buy happiness -- but somehow it's more comforting to cry in a CORVETTE than in a Kia"