Thanks to everyone for the welcome.
There seems to be a fair bit of interest in the process so I will lay it out.
I use a milling machine to carve out a cavity into a 416 stainless steel bar that is 1 inch wide by 4 inches long by 3/16 thick. I use a hardened pattern to ensure I have exactly the same cavity on both sides. The cavity is roughly 5/32 deep.
Once I have the cavity cut I use Vaseline on the inside of the cavity and then fill the cavity with 24 hour epoxy. I make 2 small holes in the back of the cavity in order to push out the hardened glue.
This gives me an exact mold of the cavity. When inlaying stone into steel an exact fit is required as neither material has any give in it and even the tiniest gap is visible when you give both the steel and the stone a mirror polish.
Once I pop out the mold I will glue it onto a piece of stone that has been cu t to rough shape.
I am currently using my drill press with a diamond burr under water to shape the stone. BY using Dykem on the outside of the mold I can see when the diamond burr just touching the mold.
This gets me very close to a true fit, them it is test and check.
I then take the two halves of the knife and give them a preliminary shaping. This removes most of the metal leaving a cavity roughly 3/32" deep.
After that is is back to the finish of the knife. The knife is peened together at the front and back. Then the stone is inserted int the cavity with a good layer of medium thickness superglue.
Once that has hardened I use a 100 grit diamond wheel with water to grind the inlayed stone o roughly the same thickness as the sides of the knife. Then use 220 through 600 grit on expanding wheel to shape and polih the stone. The use a leathe buffing cloth with very fine abrasive powder to try and get final polish.
Thats the steps at this point. Given my current lack of anything that looks like knowledge I am extremely open suggetions.
Thanks
Steve