With rare exception, all the scabbards I make are wooden... so I may as well share my process here.
My object has always been to do the most work by hand and keep the use of power tools to a minimum. I go through all of this to have a surface to carve my art into; but the process is the same whether you cover it with leather, carve into it or just paint it.
You will need a few basic tools and supplies:
Glue
Clear brushable lacquer
A nice thick piece of leather
C-clamps
A chisel or two
A craft knife
A belt or disc sander
A jig saw or band saw
First off - glue. Any good wood glue will do. You don't need epoxy, but please don't use white glue or Gorilla Glue.
You will need two pieces of wood at least 1/4 inch thick but l half inch is better. You can always remove, but you can't add, so bigger is better. It should be at least one inch wider than the widest part of your blade, and three to four inches longer than from the tip to hilt.
In choosing the wood, you want a nice straight grain - no knots. Sure, some knots are beautifully shaped and beautifully colored; but the grain twists around them, making it hard to carve. Also, knots generally don't expand and contract like the wood they are embedded in, and occasionally knots pop out - OUCH!
One edge and one end of your wood need to be squared 90 degrees, giving you a straight edge to work from.
Lay the blade along the wood with the hilt at the squared end and on the wood by about an eighth of an inch. Make sure this is in the centered. Draw a line on the center of the wood beforehand.
Now, with a nice dark pencil trace the shape of the blade and the bottom of the hilt on to the wood. You now have a picture profile of the blade and the part of the hilt that will be touching the sheath. Do this on both pieces of wood.
Decide on the shape you want for the outside of your sheath. You have been thinking about this for a while now, so you must have some idea as to what you want the finished product to look like. You must have at least a quarter of an inch on each side of the blade - and believe me more is always better. When working with wood, you can always remove more and shape it down, but there is no adding back on. I can't tell you how frustrating it is to toss aside a project because you made it too small, trying to save time.
On the other side of the wood draw another centerline, and then draw the basic outline of the shape you have envisioned, do this on both pieces.
Place one piece on your work table, tip pointed away from you with the blade profile side up, and clamp it down firmly. At this point guys, I have to advise you that you don't want to be doing this on your wife's fancy dinning room table. I know you're going to be as careful as can be but trust me it's always best to have your own work surface. I do furniture repair - you can fix it, but you will never hear the end of it!
How thick is your blade? One half of that measure is how deep you will be cutting into the wood with the craft knife along the blade profile line, cutting from the throat ( top) toward the tip. Always cut away from yourself not toward you. After 40 years of working wood I've become a fairly good medic, so again point the tools away from anything that will bleed.
Now you have a cut outlining the blade profile. Using a small chisel about half an inch wide
remove the wood with in that area till the edge of the blade is level with the wood surface. Use a sharp chisel, they work better and leave a nicer scar when you heal.
Test the depth by resting the blade in the cut out. When the entire edge is level with the wood surface, repeat this on the other piece. Do not try saving time by just carving out one side twice as deep because that will throw everything off.
You now have two pieces of wood with a cutout area that will hold the blade. Test fit these pieces with the blade inside to be sure that they don't bind on the blade. Using a jig saw or band saw cut along the line of the hilts at the throat of the sheath on both pieces. Now turn them over and cut along the line that you drew marking the outside edge. Tip: you only need to draw that line on one piece of wood,then cut it out and use that piece to draw the outline on the other piece.
You should have two pieces of wood with identical cutouts of the blade profile and somewhat identical shape of the outside of the sheath. At this point you need to seal the wood in the blade cutout ONLY. thats why you use brushable lacquer. Apply the lacquer to the cutout area only. This helps keep the damp out.
When the lacquer is dry, apply glue to both pieces on the wood surface next to the cutout so that the glue covers the wood right to the outside edge; a little thicker on the outside edge and thinner along the cutout edge. This is important because you don't want glue oozing out into the cutout area. Fit the pieces together and clamp along the edges with as many C clamps as you can, I have lots of these clamps and space them about 4 inches apart. Take a yard stick or similar stick of wood and slide it into the sheath, pressing it along one one side and then the other side to smear any glue that oozed out into the cutout. Stand this on end with the throat down and let it dry 24 hours .
Now you have a rough case that can be shaped with a rasp or a sander.I generally start with a disc sander at the tip and work the length with a belt sander WITH THE GRAIN - NOT ACROSS IT please. When you have a shape that pleases you the hard work is done.
Next I add what I call the cap - that thick piece of leather I mentioned. Place it over the throat of the sheath and trace the outline of the of the case on to the leather, then cut it out. Next, cut out a slot in the shape of your blade at the hilts; rectangular or diamond is usual. Make it snug because it will stretch out. Smooth the edges of the leather with very fine sandpaper, apply a coat of glue to the bottom of the piece, place it on the sheath. Apply a thin coat of vaseline to the base of the blade and slide it into the sheath till it's all in. Then I put a bar clamp on from tip to pommel and tighten it till it is pressing the leather against the sheath but DON'T tighten it down hard.
A coat of clear lacquer will seal the leather, and the sheath is now a bottle that will hold a blade suspended inside without rusting. I have a dagger that has been in its sheath almost 25 years and never rusted! Blades cased like this also seem to stay sharp. A blade in leather, or hung bare oxidizes and gets dull... these don't seem to do that.
At this point your case is ready to carve, cover in leather, or paint - whatever your fancy. Take it slow, work carefully, test the fit of the blade often... and don't try to hurry - you'll get there.