The lock ring is made of soft steel that bends easy. You rotate the nut the"good" way and the ring feeds out by it self. If you force the nut to rotate the "wrong" way the end of the ring will get "shaved off" and will not come out. Here is a picture to show how it supposed to work.
Can you post a close picture of the damage!?
Where is that damage on the rod?? At the end of the rod, not so big deal as on middle, where most of "traffic is"...Will need attention any way.
Not necessary toast. There are ways to repair. If there are material "sticking out" above rod surface, you can use a fine graded file and work it off, then it wont eat up the seals inside the "nut". If there is a "grove" as well, which can cause both damage to seals and leakage, it can be filled different ways. If the grove is "shallow", it might not need any attention. I have seen certain compounds, (kinda epoxy) being used as filler. A professional machine shop might be able to fill with a welder. Then it might need attention on the chrome too.