loose bearing race - K/H disc hub

That would indictate that the bearing spun in the hub. EDIT: Or as noted later in this thread the hub has a crack

I would try to find a replacement.

A machine shop could machine it larger and make you a hand full of sleeves that would press fit into the hub allowing for a propper press fit of the bearing race.

The reason I suggest making a hand full of sleeves is they might come out with the cone should you need to replace it in the future.