A few thoughts on replacing key bushings: first off, I would never glue
in one piece of bushing cloth of a set without having been satisfied
with a dry fitting of a test key on the rail with bushing cloth not
glued in.  It is surely a rude awakening to glue in a whole set, only
to find out that the keys are too tight or too loose.

If the thinnest bushing cloth is still too thick, a few ideas come to
mind.  Try finding a thinner material (stringing cloth or key bushing
leather come to mind).  Or perhaps the balance rail pins can be
replaced with thinner ones.  I cannot recommend using key bushing
pliers to try to squeeze and compress the key button.  I suppose
widening the existing mortices in the button with a router and
re-bushing would be an option, although that would require a good jig
to do an even job.

The key (pun intended) to good piano work is to study what was done and
used originally, then proceed in such a manner that the outcome clearly
meets the objective.

Jurgen Goering,
Piano Forte Supply
(250) 754-2440
info@pianofortesupply.com.geentroep
http://www.pianofortesupply.com