loose bearing race - K/H disc hub

I'm working on rebuilding a set of original K/H disc brakes on my 1970 Dart. In replacing the wheel bearings I found that one of the outer bearing races was loose in the hub - I could take my fingers and move it around in the hub. I got a new bearing and race and installed that race and had the same results. It is tight as I drive the race in, but when it gets into place it is loose - I can turn it and can wiggle it up and down a little bit. Is this hub toast? Is there a way to fix this hub?
Al kinds of suggestions as to how to "fix" it. Since a good used one is available, make your life simple and just go that way. With a repair, who knows how well it will hold up, or what you would need to do with a future bearing replacement. Would you have to go through with another "fix" at that point? Not worth it IMO since you can just get another part. I'd also take a good look at your spindle. If the bearing got hot enough to spin the race (and maybe the cone), it may have damaged the spindle also.