300 degrees is not enough to normalize. You would need to heat the whole frame to around 1000 degrees to really normalize it, and cool gradually under blankets, etc./. This is why all the comments about powdercoating damaging your frame are ridiculous... Powdercoating is only 500 degrees or so...
Given no better option, I'd cut and gradually sand/grind the areas flush so heat buildup was minimal. If the metal is blueing, you're applying too much pressure or ground too long. But check the wheelbase rules -- I'm pretty sure that karts and champs have different wheelbases depending on your class.