May I suggest hardened leather instead of wood?
It's much easier to make a sheath with, and it's quite solid!
I tried some times to make a wood sheath for my knives, but abandoned it for the leather/hardened leather ones.
I also suggest you to fill the interior of your sheath with raw wool, it contains a chemical component that will keep your blade without a rusty dot.
By the way, a very good tutorial on how to make a leather sheath can be found here:
http://slinging.org/forum/YaBB.pl?num=1265160394/13#13And here's another way to make a sheath (for an axe this time):
http://slinging.org/forum/YaBB.pl?num=1265160394/13#13But there're a lot of topics about sheaths, just type that word in our Search button and... have fun!
Greetings,
Mauro.