I'll second what Mike said Daniel.
The reason for using an end mill, is so that you get a flat at the bottom of your mortise.
It will REALLY help you hold it flat if you take a piece of wood (such as a short length of 2X4) and cutting a V into it. It's like a poor-man's V-block. Anyway, the round side of the bone will fit down into the V, and help to keep the flat (inside plain) where you want it.
You can also use a carbide cutter in your drill press or like Brian said, in a Dremel attachment.
I have a mill, and use a 3/8" center-cutting carbide end-mill to rough out most of the material. But I always come back and Dove-tail the slot with my Dremel...and typically get the last few thousandths with a file to get a nice snug fit.
Something worth note, you want a snug fit...but not a tight fit. A tight fit of the mortise to the tang, will force your scales apart.
I usually either do the fit up and epoxy the scales together, letting them cure overnight. OR, you can use Speed-Bonder if you want them to go together RIGHT NOW. But it's spendy, about $25.
Anyway, just some stuff to think about
-Nick-