If you're really well-skilled with one, you can use a Dremel with a cutting wheel, to cut out the inside area, then a grinding wheel, to slowly carve away the rest, followed by some light sanding to smooth and polish your cuts. I've also found that an exacto is great for precision work, though more patience is necessary, as it doesn't cut straight through, so you'll need to make several (sometimes many) passes over the cut to get through, but its cuts tend to be cleaner and more exact. Sometimes, I end up employing a combination of techniques, too.

Or, you can always pay a company to do it with machines or lasers, if time's an issue and you're good with technical drawing.
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“Creative ability is best displayed with the most basic tools."

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