Any ideas on how retroactive payments can be made under this Rev. Proc? Would a lump sum be permissible even if the plan doc does not permit a distribution in that form? Should a lump sum provision be added with the reforming amendment?

The IRS calls it a makeup payment in their example (see http://www.irs.gov/retirement/article/0,,id=137638,00.html) so I don't think you have to amend the plan to add the lump-sum option. The Service mentions adding interest to the makeup payment--not sure whcih rate to use, maybe 417(e)?