I've done a bit of MOP machining as well, also for guitar inlays. Your technique of gluing the blanks to a plate for machining sounds excellent. I made a small fixture from aluminum to hold a 1" x 1.5" MOP blank. as shown in the photo. I cut out a lizard figure, and cut the corresponding pocket to inlay it into. There is a photo of a finished inlay, although this one happens to be cut from African blackwood, not MOP;
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My apologies for the imperial measurements -- we colonials are rather backward, you know!