Normally when cylindrical grinding, the job is rotated at more like 50rpm or even less.
Yes the jaws would need to be set up so the outer tips of the jaws are tensioned outwards, as they are when clamping onto a job. You could still do this with a "four leaf clover" plate and then as you say set the jaws concentric with a DTI. Althoug, perfect concentricity is not critical on an independent jawed chuck. Few thou extra off one jaw is not going to make any difference when each jaw is set up in used independent of the other.
If you had access to a surface grinder it would be ideal to set the jaws up on the table and knock that few thou off that way.
I've reground several Myford (PB and Crown) chucks with clover leaf plates, ground them parallel with a die grinder in the toolpost, and they are still working well. Maybe in another 50 years they will start to bellmouth again but I won't be around to worry about that.
Whichever way you go with it, the jaws have got to end up better than they are at the moment. You could almost dress four thou off one end with a diamond file by hand and be better off than you are now. Almost.
Edited By Hopper on 23/10/2019 11:32:32