Thank you Bill for posting these great pics of a very beautiful small steam engine. This has been great reading and as some of the posts have indicated..I'm quite sure there are old time methods of refacing recessed slide valve faces hidden away in the old steam texts.
I thought about this for awhile. If this were mine I would approach refacing the worn faces in this way..because I'm lazy and really have no other alternative to the problem. I think the Shaper with offset cutters would be the best way to go BUT..I would try this way first.
Studs will have to be removed. Obviously all the rust will have to be removed to see what and where the face is worn. Best scenario is valve face runs parallel both ways with the outer valve chest face where the steam chest cover bolts on.
Being somewhat of a hillbilly when it comes to makeshift set-ups here is my plan. I would take a piece of flat steel or fairly stiff Formica and cut a hole in it the same size as the internal steam chest dimensions. This plate would be large enough so that when bolted over the steam chest opening with countersunk bolts..a..( dare I say it?) router can be used on this newly created "work table".
Another piece may have to be mounted to the router itself so the opening can be bridged allowing the router to be kept in a parallel plane = slide valve face.
Now with this jack ass set-up a suitable arbor could be made to fit the router and holding a small course Cup wheel...the slide face could be resurfaced. There needs to be a system of controlling depth of cut. Maybe TWO plates on the router rather than one bridging the opening. A stack of paper shims between these two plates would allow the depth of cut to be controlled.
On my small 3" x 6" steam engine with exactly the same porting I spent about half a day lapping the valve in with fine lapping compound. It isn't flat but it seals. The condition was much like yours..corroded and rusty. It turned out Ok. Although not optimal it did the job. A really good cleaning with our razor blade trick and ScotchBrite may show a serviceable Valve face or one which may just need lapping in to correct.
Sorry Bill..it's a hack I know. It is such a small engine. I've never done this not have I ever even used a router. But who knows? It might work
Here are a couple of pics of the valve in my engine prior to cleaning and repair )