I would not peen the threads they are to fine and sift to get a reliable job done. I would polish the face on a small ball peen and then work around the shoulder on the outside edge lightly tapping the edge. This will lightly peen the shoulder out allowing it to tighten and time up. then the green loctite when assembled.
green loctite is wicking and is recommended for sleeve retention.
With a polished hammer dace very little of the repair will show. Light taps working around the face and checking often, when you get to around 1-2 hours on the front sight it should tighten nicely. Coat both the threads and shoulder with the loctite and assemble