Steve
Mostly Harmless
I think most of that is speculation but yeah, if its not steel and isn't intended to hold an edge, a bladesmith probably won't be much help. They typically make actual blades.Quite a number of reasons... for one, the particular requirements for an Iaito are likely not to be known (or understood) by the "local blade-smith" unless they have had extensive exposure to Japanese blades, and their manufacture process... simply looking kinda like it isn't good enough... look to much of the Cold Steel range for that.
Secondly, the person asking is still a beginner in Iaido, and would likely not have much of an idea what to ask for from the blade-smith themselves, not having the experience to understand exactly what is meant when we say that "balance" is important... where is that balance point? How does it feel? What is the overall weight? And, before we get too far in thinking those answers can be given here, different schools, and different instructors will have their own preference... Muso Jikiden Eishin Ryu under Sekiguchi Komei Sensei will often tend towards longer, heavier blades... whereas Katori Shinto Ryu under Otake Sensei will go to a shorter, more manageable weapon.. and anything inbetween, depending on the circumstances... hence "ask your instructor" being the first answer, with Paul very accurately stating that the instructor should be considered the ultimate authority in this matter.
Finally, an Iaito is not made of steel... it's often a zinc-aluminuim alloy, designed to not allow the blade to be sharpened, and to not handle impact. It's unlikely that a "local blade-smith" would be used to working with this alloy, or the properties that are present, and their reasons. Steel Iaito do exist (often referred to as Mogito, or "imitation swords"), unsharpened... but these are rare.
When all's said and done, though, the best advice is to go to the guys who know what they're doing... which means Meirin Sangyo, Tozando, Yamato Budogu and similar... absolutely in conjunction with the advice of the instructor in question.
So yeah... not a good idea.
That said, there's something of a resurgence in blacksmithing in the states right now and you might be surprised at the skills local craftsman have.
I wouldn't be surprised to find a local expert.