I was one of them that posted pics. I got the Idea from Murray Tucker, and a few others that were discussing it with me back then, but He used a foredom flex shaft instead of a dremel. The mandrel I bought was too thin also. I used My saw with a flex shaft mounted in My tool post, but soon changed that to a fixed mount for the dremel It'self, so that It mounted in My toolpost. This was quite some time back, but basically the same thing as what they are selling now, Mine is just alittle more crude of a setup. It will cut billet grooves, and cut rings off clean, but I don't use the saw anymore, I plunge cut with a endmill to cut them off. I can cut them as thin as I want, but there is a hair more material loss then the thinner saw blade would have. This does'nt bother me as much, but would be nice to have a thicker mandrel for the saw. Those thin ones have way too much runnoff, and even If you get a good one they are easy to bend and eventually will have runnout eitherway from My experiences. A good thick forged mandrel of some type may help with that though. I used a brand new dremel, and it did'nt have much runnout, but the bearings in them are not really suited. You may be able to get a bearing upgrade though. I think unique may do an upgrade on the bearings for one of their machines that they sell.
I have a forged collet chuck that fits My 1/4 trim router, and converts it to 1/8 collet, that may work with My endmills, but have'nt tried using It for that yet. It maybe easier to find a decent forged saw mandrel to fit a 1/4 collet, but that router turns some really high RPM's, so I would'nt feel comfortable with out some kind of speed control. The dremel has that built in.
The biggest problem I had making My mount was that I wanted It to be quick change, and lock into the correct center height automatically so I don't have to shim everytime I want to use It. I was able to accomplish that, and setup is quick and easy. it will cut the grooves or cut rings off from the same position. My dremel stays mounted to the bracket I made, as I have several dremels, and don't need to use the same one for anything else.
I will Upgrade to a better spindle eventually though, because i still don't feel the dremel is the best tool for the job, but it has gotton Me by up to this point. Good Luck with it.
Greg