The calibration frequency of 40 hrs. is 40 hrs of instrument use.

If, as you said, "the 40hrs may not come for a long time", then you can wait "the long time" to do the horizontal linearity and the internal reflections check req'd at 40 hours. 

However, I am not sure how you can extend the required 2 month interval for checking the gain control accuracy and still be in strict compliance with D1.1.  My digital unit holds linearity and Db accuracy calibration great.

You are correct in saying the digitals hold cal better. However; any machine is subject to problems, the digitals are particularly susceptible to power supply fluctuations. I would also state that even if your usage is intermittent, it should not be looked at as an onerous task, rather it should be looked at as a matter of professionalism. A level III much less a level II could find themselves on the wrong side of a problem if they ignore the requirements of the referencing codes. Any level III that knows their craft is not going to write a procedure that is inconsistent with the referencing code for that reason without a clearly documented reasoning. Cumbersome as those procedures may be, they help keep you and your company out of legal trouble. Assuming a weld fails, and lawyers get involved due to personal or property injury or damage, from an inspectors stand point, they will be glad they followed a procedure consistent with a known standard. If that same weld fails, and it turns out the inspector violated any part of that procedure, they and their company can be in deep trouble up to an including jail time and fines. As a reference:

http://www.nrc.gov/reading-rm/doc-collections/cfr/part013/part013-0001.html
That section contains the following;
§ 13.1 Basis and purpose.
(a) Basis. This part implements the Program Fraud Civil Remedies Act of 1986, Public Law No. 99-509, §§ 6101-6104, 100 Stat. 1874 (October 21, 1986) (31 U.S.C. 3801-3812). 31 U.S.C. 3809 requires each authority head to promulgate regulations necessary to implement the provisions of that Act.

(b) Purpose. This part (1) establishes administrative procedures for imposing civil penalties and assessments against persons who make, submit, or present, or cause to be made, submitted, or presented, false, fictitious, or fraudulent claims or written statements to authorities or to their agents, and (2) specifies the hearing and appeal rights of persons subject to allegations of liability for such penalties and assessments.

http://www.nrc.gov/reading-rm/doc-collections/cfr/part013/part013-0003.html
That section details it.

In short, any document you submit (inspection or otherwise) to any plant or organization under the NRC authority (supplier, manufacture, etc) that contains falsification, (lack of reporting, not following procedure, etc.) can land you as a minimum with fines, and if it is deemed potentially harmful to the public, in jail.

This extends to several other industries in lesser and greater extents. Most level III's are aware of this concern and that is why they will cover their asses with the code, rather than make something up for themselves that can lead to those kind of concerns. DOT's in particular are going more and more down the legal path.
cumbersome? maybe, but that "cumbersome" is what's covering yours, and your level III's collective asses. You can bank on the fact that AWS committees that wrote those requirements wrote them with that in mind.