Here's something I found on making Mekugi (sword retaining peg)...
A good habit to get into is of checking the mekugi every time the blade is cleaned. When checking make sure that:
1. It is seated snugly in its hole
2. It is not crooked
3. It is not extending out from the hole (this could be a sign that it is working its way out)
4. It has no cracks or other signs of damage
5. It has been inserted properly [from the ura (the side that is facing you as you wear the katana), not the omote (the side that is facing out as you wear the katana)]: this will reduce the chances of the retaining peg falling out during nukitsuke, etc.
6. It has a good color. A good quality mekugi made from strong bamboo will be an amber color. A bad mekugi made from weak bamboo will be a light beige or egg shell color. Bad mekugi should be replaced at once.
Always keep a couple of extra mekugi in your katana repair kit, just in case.
Where to Get Mekugi
1. katana and mogito suppliers
2. sword shows
3. make your own
How to Choose a Strong Mekugi
1. The color should be amber. The lighter the color, the weaker the bamboo.
2. The grain should be small and tightly packed.
3. There should be no cracks, dents, or other imperfections of any kind in the wood.
4. Be sure that it is the correct size for your katana. It should fit snugly in the retaining peg hole.
Rule of Thumb: If it looks like a piece of a cheap chopstick, don't use it.
Making Your Own Mekugi
1. Start with good bamboo.
a. The bamboo plant should be at least three years old.
b. It should be straight.
c. It should be growing in a sunny location.
d. It should have a wall at least 1/2" (1.2 cm) thick.
e. The grain should be small and tightly packed.
2. Cut the bamboo near the ground. The section between the roots and the first joint is the strongest and makes the best mekugi.
3. Cut off the bamboo above the first joint and do with it as you please.
4. Allow the bamboo to season in a dry, shady place until it is a nice amber color. This usually takes 6 months to a year.
5. When the bamboo is sufficiently dry, split into segments (half, quarter, eighth, etc.). I've found that Japanese nata work really well for this.
6. Take one section at a time and use a saw to cut it into about 2" (2.5 cm) long pieces.
7. Using a knife or other similar tool form blanks from each 2" (2.5 cm) long piece by splitting along the grain. Each blank should be approximately 2" long X 1/2" thick X 1/2" wide ( 2.5 cm X 1.2 cm x 1.2 cm).
8. Again using a knife, remove the outer skin of the bamboo from each blank, but be careful not to remove too much. The part of the bamboo near the skin is stronger than the part near the center hollow section. Therefore, the outer part of the bamboo is the best part to use for making mekugi.
9. Again using a knife, split off slivers of the bamboo until it is roughly round in shape.
10. Since the diameter of retaining peg holes can differ slightly from one katana to another, it's a good idea at this point to compare the size of the peg with the size of the hole. Keep removing splinters of wood until the new peg will fit snuggly in the hole.
11. Tsuka come in various thicknesses, so be sure that your mekugi is the right length to sit flush with the surface of the tsuka on both sides. If it is too long, cut it to the right length.
12. Slightly taper one end.
13. Smooth out any rough edges.