Step 5: Trace the nut needed (in my case #8-32) over the centered hole. Use an exacto knife (square chisel tip if you have one) to carve out a cavity for the nut to sit in so that it is flush when inserted. Use drill bit to enlarge the pilot hole into a clearance hole for the screw that will be used to mount the rail button.
Step 6: Use CA Glue (superglue) to install the nut in place. I found it easiest to thread the nut partially onto a longer screw, and apply the glue to the 6 sides of the nuts, then push it in place.
Step 7: Round/bevel one or both ends of the balsa to eliminate tangle points for any wadding or parachute lines.
Step 8: Check fit in body tube. Once I am happy with it, I mark and predrill the rail button location on the body tube. Then I use masking tape at the end of a dowel to hold the balsa nut block, apply wood glue and guide it down the tube to the location and install a rail button in order to pull the block against the tube and allow it to dry.
Hope some of you can find this useful!
-Jeremy