I started a project like that, although I just never got round to finishing.
I started with this tutorial:
http://www.projectguitar.com/tut/mat.htm
I used PVA glue as a sanding sealer and it worked fine.
The only major problem I had was the edges. I didn't pay close attention to filling the edge and getting them really smooth before painting. I guess if I had used a paste for that part it would have worked better.
I tried out the technique on a cheap body I had kicking around first, which is always a good idea when starting out.