John,
Jerry's above repair is very proper and the best and most permanent fix. Here is a quick and dirty repair that should get you at least another 40 years out of the mast step.
Use a 5" or 6" hole saw to remove the top skin, scrape out the bad core and dig it out from the edges until the balsa you are pulling out looks clean and dry. Using the same hole saw cut out a plug from 3/8" plywood. Draw a 8" circle around your hole and taper the edges out to that. Pack thickened epoxy into the void between the skins and lather up the bottom of the hole, stick in your plywood plug, butter everything up with the thickened epoxy and apply your repair plys of glass mat wetted out with epoxy. Pre cut your repair plys, mask off a large area and have every thing laid out and ready to go 'cause your going to be a sticky mess. If you put on 4 or 5 sets of rubber gloves you can keep peeling them off when they get too messy and you want to pick up a tool or something. The repair could be done with polyester resin instead of epoxy if cost is a factor, its not as good, but thats what the rest of the boat is made of.
.02 cents
Mike