That is a very clever trick to re-use the plug as guide for a larger hole saw. But the plug will be a bit under-sized to the existing hole, so it might bounce around. If the palm router won't go far enough to the sink, I might try this:

Clamp a board on the bottom of the butcher block.
Drill from the top with the existing hole saw to get the guide hole.
Drill the guide hole all the way through.
Flip upside-down, use a larger hole saw and go about 1/4 deep into the butcherblock.

I hope I will be able to chip away the rest with the surface relatively even. but I have plenty of scraps to practice on.