Just picked up an old M-12 in 20 bore and there is a slight ring of rust in the chamber where the brass sits, not really bad but I think it grabs the spent hull sightly on ejection. Gun still cycles fine but dose not throw the spent hull as far as I think it should.

Other than wrapping a brush in steel wool and oil and working it with a drill is there a better way I can remove the rust?

Get yourself a 1/2 wooden dowel and cut a slot in the end. Chuck it in a drill motor. Insert a piece of green Scotch Brite pad in the slot, apply a little oil and go for it.

If I need something a little more aggressive, I use one of these:

http://www.brownells.com/gunsmith-tools-...e-prod7930.aspx

http://www.brownells.com/gunsmith-tools-...e--prod647.aspx

If you want something a bit less aggressive, you might try some Flitz metal polish. Rub it into a patch between your fingers and then wrap the patch around a cleaning mop or brush. Use it by hand or power it with a drill; your choice.

Isnt there a tool for this called a honer?

Yep.. A Sunnin (sp?) hone.. For older, cheap shotguns with very rough chambers a Sunnin hone and 500 grit stones will help remove a lot of roughness.. finish up like Malm stated - use a slotted dowel wrapped with wet/dry paper of 360-600 grit..