LFL did in fact do the 04 DVD color-timing themselves prior to the Lowry Digital process, as reported on starwars.com. Although I'm not as certain if they didn't color-correct on the 97 timing, as they did have the color-timed 97 prints (not just the o-Neg) also from which to work with on the HD scan. Either way, it's this step which they used to give things a Prequel look, or try to give them a Prequel look.
But yes, it all boils down to one truth: George has all the elements he needs in his basement to do an HD quality version of 77 SW with minimal investment and effort. An HD scan of the Technicolour print. The one/s probably originally shown to Spielberg and friends, the ones that George himself refers to as: "This is the Star Wars I made."
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adding for Scruffy: Very likely there is digital copies. But it's not burden for Lucas to use the Technicolour source, he already has once. And I bet they have the equipment in LFL to do the scan themselves. Such a restoration is really no skin off his nose...