You can use the router table or a table saw or even a miter box to get a clean shoulder cut. You can also cut some slots to get a standard depth.
I would use a narrow bit so as not to tear out any chunks. It's more about getting a clean shoulder and multiple cuts to make chiseling the rest out easier and accurate.

I'd make it a little large (by not setting your depth the whole way) then use a scraper (or use a chisel as a scraper) or use sand paper to pare it down.
What ever wood you're using, it should be soft and easy to work.
If you take your time and work in from the end you'll get exactly the fit you want.

Greenland paddles often have non-round shafts, so a lathe isn't going to be much help. (and probably not long enough anyway.)

Will

: Ah OK - router table! Just need to make a bearing block perhaps if
: there's an oval section over the table. Thanks!

: Rich