Nathan, you don't say what the width of the block is but if you can lay it down and clamp it onto the ML7 cross slide with the bad end facing the chuck and the good hole exactly on the Lathe centre line then try the following:
1- Get the good hole lined up with the 6.5mm drill in the chuck (or better still a collet.) and set the micrometer dial to zero. Be sure to take up the backlash according to which way you have to go to reach the duff hole.
2- Change the drill for a decent size end mill according to what you have – say 10 / 12mm and set it to the right centre distance from the good hole. End mill it out as far as you can go.
3- Change the end mill for the equivalent drill and drill it out as far as practical.
4- Do the same for the good hole.
5- Turn it all round and do the same for the other end.
6- Whatever you had in mind to get you to 20mm