Zee, just throwing this out here. Is there any reason you can't use 1/8" drill rod for this piece, then make adjustments to what ever it goes through? For instance, turn down the end where it goes into the pistons, and open up what ever guide it goes through on the end of the cylinder.
Directly to your trouble, it sounds like you have tool sharpness issues, as you suspect. Show us pictures of what you're using shot from a couple of angles.
Making this piece can be done, but you have a kind of crummy material to work with for what they want. If the print simply says to use "CRS", that leaves you wide open to many materials. 1045, 1144, 12L14, 1117, 1215, 11L17, (and more), are all CRS. Pick one you can work with.
Dean
stinky, crummy, Twinkie eating, stinking...