handle() and emit() are high level methods of a handler, and format() is at a lower level. Not all emit() methods will call format(). For example, socket-based and queue-based handlers don't. So it is not in general possible to separate format() out - you will need to have a customised handler to deal with your somewhat unusual use case, and do whatever you need in there.

Threading is a complex area and while logging is one specific case you may have come across, it's entirely possible to have a situation with any other lock (e.g. in your application) where acquiring the lock and calling __unicode__() on one of your objects will also result in a deadlock. So your proposal wouldn't fix the problem in a general way - just move it so that you might avoid the problem, but a more esoteric use of locks wouldn't necessarily work. In general, to avoid deadlocks, you have to acquire locks in a fixed order, and only you know what those locks are - so you can implement the appropriate acquisition and release code in your handle().