Hi Mike:
I did have what may be a similar problem with my 1974 MKII 850. Whatever I tried I ended up with very poor rear brake performance, this despite having another Norton that I have often removed the rear wheel and the rear brake works very well, (for an old brit bike).
With the bike on the center stand and rotating the rear wheel by hand, I noticed that while the rear wheel ran true, the rear chain was wobbling slightly from side to side. Clearly the brake drum was not aligned correctly. After many failed attempts to get the drum running true, I ended up installing another brake drum and the problem immediately went away! The issue ended up being a small deformation of the brake drum collar that mates with the base of the brake drum stub axle base. Not sure how the deformation could have occurred, although judging by other issues with the bike, the previous owner was a 1000 lb gorilla.
Procedure that works for me is tightening the two bolts in stages, (like torquing up a cylinder head) always while pressing hard on the rear brake pedal to keep the drum centered. Between nipping up the bolts, frequent wheel rotations to determine if the wheel and brake drum are running true and to cause the brake pads to contact different portions of the drum.
Hope this helps
Cheers,
James