Actually no, the tone hole does not have to be circular. Take a look, for instance, at the Lopatin SquareOne flute, with square tone holes (but don't believe the hype). Many handmade wooden instruments have oval tone holes, and crescent inserts for tuning make tone holes non-circular.
SearjentSax makes a good point though: if the tone hole was constructed to be circular and it no longer is, there is a good chance that you have distortion of the body tube, since tone holes are connected to the body tube. If it is a soldered tone hole, then it is almost certainly leaking. Levelling a tone hole is a non-reversible procedure, so you don't want to be doing that before finding out if it would be better to have the hole put back in its original shape.
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