If I was still close by I'd say get a few of us over and we can all
take the p*ss give advice.. in fact I'd have offered myself up rather than Kevin
I have the same Clarke welder btw - it's a great bit of beginner kit; though I'd love a more advanced model now. There is something incredibly satisfying about being able to stick bits of metal together and make something out of nothing - quite addictive! (Most recently I modified the pedal box for the Cobra to add a 'throttle stop' - the welds wouldn't pass any beauty contests but once dressed back it looked rather passable if I do say so myself)
But yes - chop out the section with an angle grinder/cut-off wheel (latter is easier to manoeuvre but doesn't have the grunt of a grinder) - heck even a dremel would work given enough cutting wheels
- dress back the paint a little to get a clean weld, make a template (cardboard and a dirty finger) and cut the replacement panel to suit (or cut the original panel to suit the replacement - easier if you have a full replacement sill!) and weld in.
You could joggle the original panel back and avoid butt-welding if you wanted to make life a little easier and had a joggler to hand.