I would not go without the hardened washer, machining for clearance is the right way to achieve maximum clamping load. I also don't recommend this constant retorqueing either. Torque to the proper torque the first time, go thru one heat cycle and recheck torque. Then leave it alone, this loosen and retorqueing , was a crutch when people incorrectly installed o-rings and you would have to do this cycle several times to get the o-ring to seat in the fire ring of the gasket.
I've seen o-ring protrusion all over the map, as much as . 010 differences in the same hole. To be cut correctly, o-rings need to be done on a mill and not a BHJ tool. The BHJ tool is a great thing if protrusion tolerances are not important, as in a gas type racing engine where you have a receiver grove and a dead soft head gasket.