Ken,
By grinder, did you mean a bench grinder with a stone?
2 hours? Must have been a really course stone, or you could have some gouges. 60 grit should go pretty quick tho. However, when there are gouges you have to sand until the flat areas are worn down to the lowest gouge.
Here's a suggestion. Use a HARD backing for the paper, like a file. Clamp the blade to a narrow board on the bench, then draw file with the paper.
If this is paper is not for metal, it might loose grit in a hurry. Go to the auto parts store and get some of the red stuff for metal finishing. Plan on going thru a few sheets. Over-using paper is a common mistake (I should know!) I've found that if it is going to take 3 sheets to do one side, then it's going to take 3 sheets. It doesn't matter how long I try to make the paper last.
Another thing is kind of metal is this? Has it been annealed?
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To answer your question. I do whatever it takes to get the bevel flat. Then work it down with 220. After that go length wise with 320 until all the marks are out. Then one sheet of 600 per side (length wise), then 1/2 sheet per side of 1200. This is what Fowler (at least I think it was him) calls the easy hand rubbed finish.
I'm using a belt grinder more and more. The knife I'm working on right now I did this:
After heat treat.
Belt sand it out with A100 (Trizact)
Hand sand with 320 until all the marks are gone (have to return to A100 once in awhile)
Belt sand with A45
Belt sand with A30
Hand sand with 800 Removing all the marks
Hand sand with 1200 Using a rubber backing, only one pass before moving the paper.
Hope this helps,
Steve
PS Cool shape on the knife.