Nolethane is a bit of a pain in the ass to work with because you have to try and keep the temp low otherwise you end up with a molten mess but it is possible with care and very sharp tools with steep cutting angles are best. You can try it and see otherwise just grab some other bushes off the shelf that will fit without much mods. You might have to increase the inside dia of the retaining washers as well but these might come of the wrecked LJ as well.
I prefer to use rubber ones because with rally the shock loads are transfered to the front mounts where they are welded to the rails and they can crack at the welds if everything is TOO stiff. It depends on your application I guess.

Happy castoring.............