The highest court to hear the Farmer case said no, the Hughes Amendment does indeed ban possession of new MGs by civillians and that ATFs interpretation was proper. The SCOTUS of the day refused to hear the case, so the ruling stands. However, the higher court only ruled on the ATF interpretation versus Farmers and totally ignored the Second Amendment and Congress' failure to assert an Interstate Commerce or Taxation reason for the law issues Farmer raised.
However, many Yarons ago I did read of a case in the 7th Circuit Court of Appeals that essentially overturned the MG ban on Constitutional grounds, basically the same circumstances as Farmer V Higgins. I cannot find reference to it anywhere now, though. ATF decined to appeal it further, so in theory at least, a Form 1 MG app should be approved in the 7th's territory. Doubt if they will, however.