Hey there,
You've got the right idea on removing it. Take out a section, then remove 1 side at a time.
It can be a bit of a challenge getting each side out though. What I do is position the lug upward, and sweat as much brass out of the lug and down the tube as possible. Then when you've gotten as much out as you can, heat around the whole lug with a big ol' flame and wiggle the tube out. Getting the tube to come loose can be pretty hard with brass. It will probably be a little messy, and you'll want to go in with a small grinder tip and clean it up in there afterward.
As for a new tube you could probably use mild steel, but if going through the trouble of replacing a tube you might as well use a cromo butted tube... they are not that expensive. Where are you located? Peter at Ceeway is in the UK and ships anywhere
www.ceeway.com
Maybe someone else here has better tricks for removing the tube...