This is what an adjustable engineering hand reamer for tuning the tolerance of holes in metal (e.g. the bore of bronze bearing bushes after they are pressed into place) looks like: http://www.newmantools.com/reamer/expanding.htm Much cheaper these days than used to be the case, but still well over $100.
One key feature is that the cutters form a long enough cylinder for the tool to remain properly aligned with the axis of the starting hole.
I wonder if a low cost version of any such tool for use on wood exists?
ian