I made a few more of these. The stubby olive-wood X-acto is by far the most comfortable. The way it fits in my hand seems perfect. If you remove the red handle from the X-act you are left with a stubby little blade holder. you could also cut down one of the regular sized X-acto knives for this size blade holder.
Step 1: Grab some scraps
Step 2: Rough it round
Remove the live center and install the Jacobs chuck in the tail-stock.
Step 3: Drill the hole for the knife
Once the hole is drilled, squirt some superglue inside the hole. and using the tail-stock as a press. Press the Xacto barrel into the hole as deep as it will go. If your hole is too deep stop at the line on the knife. DO NOT GO TOO DEEP, YOU WILL LOSE YOUR KNIFE IF YOUR NOT CAREFUL.
Step 4: Finish turn it
Finish shape the piece to your liking.