Cut the top off with a saw at the desired length.

Step 1: Drill the Hole

Drill a hole in the bottom piece big enough to fit the container you will use in it. I used large drill bits and put several holes in a circle pattern.

Step 2: Drill a Hole in the Top Piece

Drill a hole in the top piece big enough to fit the top of the container in. Smooth out the holes in both the top and bottom pieces with a Dremel tool.

Step 3: Make the Two Pieces Fit Together

Drill small holes in the bottom piece around the edges and insert small metal or wooden dowels into the holes. Make sure the holes are not too big and fit the size of the dowels snug so they don't come out. Use glue if needed. Drill holes in the top at the exact locations as the dowels on the bottom. This holds the top on when put together.

Step 4: Side View of the Log With the Container It Was Built For.

Step 5: Make Sure It Fits

Place the container inside the log and make sure the hole is the correct size for the container you are using. Be sure that the top and bottom of the log makes a good seal with the container in it. Coat the whole log inside and out with clear water-seal spray.

Step 6: Make It Stable

Drill 3 holes in the bottom of the log and insert rebar stakes. Cut the rebar so they stick out apx 6 inches. This allows you to push the stakes in the ground to stable the log from tipping over.

Step 7: Mark It As an Official Geocache and Fill With Cool Stuff

Decorate the Geocache container as desired and mark it as an official Geocache with muggle instructions. Fill the container with a log book, a lot of cool swag and a first to find prize.
Muggle: A non-geocacher, someone who has no clue why you are snooping around with a GPS device in a public location looking in weird places.
Swag: Cool little trinkets placed in a geocache that you can take to remember your experience finding that particular cache, but if you take one, you need to leave one.

Step 8: Camouflage It

I added corresponding numbers to the top and bottom so Geocachers could put it back together correctly and easily so it would stay dry. I glued moss around the saw cut to help disguise it.

Step 9: Place the Geocache and Record Coordinates

Place the assembled Geocache at the the hidden location. Put a GPS device on the cache and record the coordinates. Take the GPS device off the cache and walk a few feet away and put it back on the Geocache container and record the coordinates again. For the best accuracy, do this apx 10 times. Take the average of all 10 coordinates to use as the listed location.

Step 10: Take Your Time When Recording Coordinates

Be sure to take the extra time to correctly average out the coordinates as explained in the above the step so Geocachers can avoid this!! DNF(Did Not Find)

Step 11: Post Your Geocache

Post your new geocache to Geocaching.com. Always leave a hint to help fellow Geocachers find it, even if you think it is not hard (Of course you don't think it's hard, you know exactly where it's at). Also, a very easy Geocache is sometimes very difficult to find if your GPS is affected by cloud cover etc. A hint to the general location is always recommended.