If it's hard then use a die grinder - just spread a small amount of grease around the shaft/housing interface and cover any openings to prevent crap from getting into the bearings and motor.
The method described is what I have done in the past - use the set screws to mark the shaft and either file or grind small flats. I have heard using a pointed dimple on the shaft with a pointed set screw is better than a regular set screw on a flat but I just use a flat for simplicity.
Scott
Consistency is a good thing....unless you're consistently an idiot.