I'm not a leading expert on LED's but here's my 2 cents:
The light generating part of the LED is a diode that's buried in the bottom of the package. The curved package is a plastic lens designed to channel and spread the light. Altering it's shape would affect the beam pattern and light output.
As long as you don't sand down to the diode, the LED will continue to function but you're likely to reduce the light inensity.
edit:: I guess I should have added that flat LED's are readily available from electronic parts distributors. Try Digi-Key (
www.digikey.com). Here's a
link to their catalog. The diode models in Figures 1,2, and 3 are all flat-top.