If you want to see what you are dealing with, you can take the handle off of the lever as they are attached in the same way (and in fact use the same replacement part). It does look like you have a lot of rust on yours and it makes sense that it will be hard to remove. When you do get it to unscrew there is probably a 50-50 shot on if the handle will come off or the portafilter (the are both threaded, but different size threads).
Richard Penney had good info on the handles that might be of help in my turning your own handles thread
http://www.home-barista.com/levers/turning-your-own-wooden-handles-for-la-pavoni-t7583.htmlAmong other things I found these numbers he gave helpful (and I don't think these depend on pre or post Millennium model...
The lever handles are about 12mmx1.75 tapped and the pf grip is ~10mmx1.5 as a stud ( on mine it is a perfect fit for a 3/8ths- 16 stainless steel bolt.)
Good luck.
Hugh