Ok, the rod "hole" is routed out from the inside. Actually makes it easier to work with at this point.
How much space do you actually have between the barrel and rod? You only need an eighth inch or so for the screw to go through. The barrel can be notched a bit, if necessary (don't go up towards the barrel too much, it can wreak havoc with the sideplate...), and the screw can be notched a bit to clear the ramrod, if necessary. Both are pretty common procedures.
If you think you still need more room between the rod and barrel, this type of ramrod "hole" is easy to get at and cut a bit lower. I used to do them this way, actually, before I got the hang of drilling rod holes (and it's still the most difficult thing in the world for me to do). I would cut it out from the inside, and once it was at proper depth, I would then make a piece of wood fit back in, filling in the "web" between the barrel and rod, making the wood solid again.