The birds are only found near the tip of Cape York Peninsula in Far North Queensland and the population is estimated at about 1,500.
Australian National University (ANU) zoology professor Rob Heinsohn described palm cockatoos as the "animal kingdom's match for Ringo Starr or Phil Collins".
"They're a remarkable bird because we found out they're the only species that can manufacture its own musical instrument," he said.
"[They] fashion thick drumsticks from branches, grip them with their feet and bang them rhythmically on the tree trunk, all the while displaying to females."
Professor Heinsohn said the species had already significantly declined in the past 20 years and was threatened with extinction.
"The really alarming thing is our projections from the data show they're going to keep going down really, really quickly and within three of their generations' time they're going to be down to half again," he said.
"That's the best-case scenario. The true situation is probably much worse."