Those old brass hanger Bagleys DB3 are special, but if the the lip is broken or stressed. without a doubt I would turn it into a BB3 with a few easy modifications.
I think the action and qualities of the shallow running square lipped BB3 is much more sought after than the DB3 so I started going monster garage on my Bagley brass DBs that were no longer fishable in their deep diving form. Dont do this to collectible or good quality vintage DB's.
First off I am talking about first generation Bagley balsa Bs, they have all brass hangers and the best ones are the early ones with fatter chunky body style and urathane coating (usually develope age lines)
When I started modifying them, I would spend much time removing the old broken deep lip and filling slot, but found a quicker way that doesnt hurt the action what so ever of the shallow runner, and I even prefer to retain the original finish even if battle scarred and requiring a little epoxy sealing here and there.. Yes you can strip the whole thing down and completely refinish it, but for some reason it just loses a little of the Bagley magic when you do that. I even try to avoid completely re-sealing the topcoat as it adds weight and I want the lure to be as close to the fish killer it was in the 70's.
As stated above, this proceedure produces a BB3 with a good chance at a hunting bait, but it wont be pretty. Again, I think action speaks louder than pretty finish. use a dremel or file and score and cut away the remaining deep diving lip off nose of DB, be careful to leave brass line tie intact. bend hanger down out of way and file the remaing lip flush with nose. cut off lead pill with a sidecutter and cut one end of the two strands of brass hanger as close to nose of bait as possible. straighten brass wire out and shorten brass wire to approx an inch and a half leaving the one end attached yet. then bend / double back the end of the brass over itself about an 1/8 of an inch on end. drill a small hole just below the old hanger deep enough to accept the inch of wire. mix epoxy and fill hole with epoxy using paper clip or thin wire. then using needle nose feed brass into hole and re-shape new bend for line attachment. brass bends easily and can be made rounder after epoxy dries, just leave enough to work with to make good loop about the same size as hook attachments. (original BBs had the line tine just below the tip of nose of bait, not on the nose, so going below the old lip and then bending a smooth loop will get you right where you need to be) use extra epoxy mixed to lightly seal old lip/ nose area and any other dings in bait, especially around old hook hangers. Now cut a new lip out of thin lexan (about 5/64 thick). original lip is 1 inch by 1 1/8 inch by 5/8 inch. original lip slot was cut at a 50 degree angle from centerline of bait 3/8 inch below line tie entry point. lip angle is critical, if you can make a jig to hold lure and use bandsaw with guide to get it perfect. Depth of lip is 5/16. lightly round radius of leading corners of cut lip and glue in place.
I have a box of these little monsters and they fish every bit as well as a original brass BB3 which are now all hanging up for display.
Pics below, hope I explained the operation well enough to make sense...
Herman