If you're taking powder off a stone, you're probably not using oil on an oilstone, and I suspect the stone is already ruined. There is a hardware store on Broadway, two blocks north of Canal Street in Manhattan. On the right side of the street if you're walking uptown. They have the best price and selection of Diamond stones in the city. If you want a ceramic stone, there is a kitchen supply shop not too far away called the "Broadway Panhandler" located on Broome Street.
Right across the Street from the hardware store is Iceberg Army-Navy. Find Aaron there (he's off on wed. I think) and ask him a few questions on knives.
Maybe we can get T.Erdelyi to give sharpening seminars.
The quick and easy way is to use the triangle system, but all the above options tend to cost money. If you're on a tight budget, a two grit Aluminum Oxide stone and some baby oil should cost no more than 7 or 8 dollars and with some practice, leave a very good utility edge on your knife.