It is indeed a snapped dropout. I've had braze-on bosses snap off before, which have been easily welded back on, but what with it being at such a high stress point I wasn't sure whether it'd be alright or not, I don't know much about welding you see...
^ He is always selling Pinarello frames on ebay, hard to tell how many of them he actually sells though, it looks like he must have a "connection" somewhere
Cheers adroit. Any idea on rough price?
Would another option be to weld a sleeve over the split? Is a sleeve even a thing?