Vaporologist, Your ceramic looks largely like mine. I have done both of mine, one with the diamond files, and the other with the Dremel 7144 diamond point bit (1/16" diameter). Dremel is quicker, but also at the risk of too much material removal, or if your not terribly coordinated, I would personally take the diamond file route, less chance of breaking the ceramic. both of mine work equally well, (insanely well I should add)
I will also mention that the Heat treated (hardened) nextel 312 doesn't shed the same as the unhardened product. MSDS sheets are available on the web, as well as the lab studies conducted on inhalation of the fibers (both hardened and unhardened) on lab rats. That being said, we aren't rats, and we all react differently. The information is readily available on the web, and should be appropriately researched by anyone who is interested in using it.
Poppa D wants us all to remember that anything that isn't certified as safe is always a risk. Nextel 312 was developed for NASA as heat shielding, there is LOTS of information regarding its testing on inhalation risks. It is exceptionally important for people to realize (especially those abroad searching for an available product like nextel) need to remember that most refractory ceramics, (including silica based products) can, and do cause silicosis and mesothelioma. Don't try something you DON"T KNOW! Do your research... or possibly suffer the consequences