The first method is very easy and only requires one standard handguard retainer and a nut and bolt with lock washers. 1st I used a saws all to carfully cut down the middle of the HG retainer starting at the top and stopping just before you cut all the way through the bottum. Next you grind or file the two steps on the inside of the hand guard retainer so its completely rounded inside. You then bend the HG retainer around the barrel and use the bolt and nut with lock washers in place of the retaining level.
This pic shows the cut retainer cut completely through but the bottum edge should stay intact.
heres how it looks finished, done right it should fit snug and look almost unmodified. If you screw up, no biggy, you can get handguard retainers for about 13 bucks. This method requires the least amount of work.
The next method takes more work and skill with tools but in the end leaves you with a barrel completely cut for regular hand guards, just how the AK was meant to be.
I started by removing the front sight block and gas block retaining pins. I drilled into the pins just deep enough to act as a guide for the punch making it easier to knock out the pins. Its best to buy new pins instead of reusing the old ones. Next, I used a shop press to remove the FSB and GB.
The next step requires taking an unmodified HG retainer and sliding it on to the naked barrel. You then line up the HG retainer so it sits level. Once its lined up and at the edge of where the HG retainer goes on the barrel, I wiggled it front to back pushing down on the HG retainer each time. This will carve in little scratches to match the steps on the inside of the HG retainer. You will then be able to see where you need to make the cuts on the barrel using these scratches as a guide.
From here you can use a file (takes forever) or a grinder with grinding wheel. I've found that most files and grinding wheels are just the right width for the cuts we will need to make. Go slow, becuase a mistake here will ruin your day. After each small amount of cutting use white out or a sharpie to cover the part you've cut on the barrel and slide the HG retainer back on and start to wiggle again. When you remove it, there should be new scratches to act as guide marks for you to grind. Make sure to line up the HG retainer each time you make new guide marks so it comes out even. Also make sure you cut only deep enough for the HG retainer to slide on.
Once your HG retainer fits the way you want it to, use the same guide marking method for the retaining level. Press firmly trying to close the retaining level. When you slide off the HG retainer it will leave a guide mark. Use a rounded file and cut on the furthest edge of your guide mark (side closer to the end of the barrel) Cut little by little and use the same method of guide marking until level closes.
Pictures of the retaining lever cut
the finished product. Fits snug and is level with the hand guard.