Websterz -- Let me restate things so I can either demonstrate that I know what you need to do or expose my misunderstanding...
You are fluting round bar with ø.250 inch slots that are .250 inch deep. Correct? The material is 4140 alloy steel in the annealed condition. Correct? Your mill has the power to make the cut, but it lacks the rigidity to do so accurately in a single pass with an end mill. Correct?
41XX series steels are known as chrome-moly steels. Molybdenum is a particularly gummy element. In the annealed condition, it makes for rather "mushy" cutting. I prefer to machine it (whenever possible) in a lightly heat treated condition (say Rc35 nominal) as this makes the matrix around the molybdenum rigid enough to minimize the "mushy" nature of the moly. In addition, if the ends of the flutes do not need to be perfectly full round, I would suggest that using a ø3/16 or ø7/32 end mill to rough the slot and another, dead sharp, end mill to finish it a worthwhile thing. Using the correct cutting lubricant may gain you quite a bit. I have been using TapMagic Gold with very good success.
I do not believe that a periphery-cutter is going to gain you much unless using it increases the rigidity of your set-up.
Does this help?