Yes it can be done but you will need a pretty big lathe or some special machine for it. There are one or two specialists in the UK who do this and it is better to do it with the rim fully built and trued anyway. If you do it to a bare hub/drum there is a real risk of the drum distorting again when the spokes are tensioned. I know it's a long way between towns in Oz but I'm sure there must be someone there to do the job? Have you tried the local vintage and classic bike people? They have been facing this challenge for years already.
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Maybe it´s woth to ask mecanics who deal with trucks and their brakes. They might have that kind of big lathe to work on a complete wheel
It seems that I have a similar problen with a Borrani rear wheel, but its not that serious (and it´s only a rear brake )
I know of a couple of blokes in Kent who can do it, it's pointless doing it without the wheel being built anyway, it will distort again when the rim is trued. It always helps to know where you are located.
Before you go skimming the drum it is worth checking the last bloke who lightened up the spindle had the brake on hard before and during the tightening of the spindle. If he didn't then you will get pulsing of the brake. Drum brakes are not common these days and the big list of good practice, tricks and tips that go along with making them work nicely are not widely considered.
Have fun.
Gary&Anne