I really like the way the toolbox pencil turned out so I decide to use more of the same wood I stabilized using Cactus Juice from TurnTex.com.
I did not have any ferrules left for this tool but I did have 3/8″ aluminum rod, a file, drill bits, and a scroll chuck for the lathe. I put a piece of rod in the scroll chuck and began shaping with a file at 500 rpm. I just put a slight taper on the rod at about 1/2″ from the end then drilled a 1/4″ hole about 5/8″ into the rod. This made for easy parting off.
I then used calipers to measure the inner diameter of the ferrule and then began working on the spindle. I slowly approached the diameter required and then fit the ferrule onto the tenon I made. Then I drilled a 1/16″ hole about 3/4″ deep into the end of the spindle to accept the blade I made from a jig saw blade.
Once I got the ferrule on, I then turned the blank to a shape I liked and made it a comfortable length (again using a Blue Spruce Tool Works marking knife as a starting point). Nothing to this really, just be careful not to push too hard on the spindle and keep the material thick as possible as you taper the blank to prevent the work from breaking. Once the desired look is made, just sand (if not using a skew) and finish to your liking.
Ultimately, I am not entirely happy with the aluminum ferrule. I may remake one with a slightly larger brass ferrule soon. But for now this will do just fine.