As you do see items like this there must be a way of making the hole.
There seem to be two options:
Remove most of the waste by drilling and then use one or more broaches. Making a few thousand a practicable, and affordable, method for one or two hmm.
Or drill out most of the waste and file to shape and size, In olden days I guess apprentices practiced doing this and got good at doing it :will need a lot of skill. A home made single stepped broachy thingy might be usable to bring to final size.
Can't think of a reasonable method if you want it as a blind hole — on wit the grub screw!
JOHN