I don't think anyone is picturing this correctly. If I understand correctly, the stay is a 25mm high oval and the dropout is a 16mm high flat plate. There is nothing that can be made on a lathe(round) that will adapt from one to the other. The only solution, that I can think of, would be to attach a "C" shaped larger tube section to the front of the dropout to make a hood for attaching the stay. The other option is to just find a different stay with a longer tapered section.
I had a similar problem with the flat mount on the aluminum frame that I just built. After cutting the stay to the proper length, the stay was higher than the 25mm hood on the dropout. I had to smash it in the vise to make it fit and the weld bead is still proud of the brake mounting surface.