Routing in hardboard = masonite

My latest attempt at organization is a set of storage bins suitable for CD media in jewel cases; each bin has wood front/back panel so can go drawer-like in a case, with only wood showing.
To save weight, the sidewalls and bottom of the bins are of tempered hardboard (we used to call it Masonite). The sidewalls are glued to the front and back, but the bottom floats in dadoes in the wood, and tabs on the bottom engage slots in the sidewalls.
It's all ready for glueup, but two problems arose. First, the tabs were formed by using a dado blade to nibble most of the material away (four tabs, each 3/4" long, are all that's left of the 12" edge). The problem is, it takes a long time and generates lots of sawdust.
The material is 1/8" thick, so the slot dimension target is 0.130".
Then, when the time came to make the slots, I found that my Dremel router with fine endmill blade makes a ragged cut. The same router, with a rotozip-style steel cutter ALSO makes a ragged cut, and the length is too great to use conveniently (maybe with an inch-thick subbase added, it can work). The true router blade for these cuts doesn't allow starting the cut blind, so I've stacked and predrilled all the sidewalls.
First question: is there some trick I'm missing to making a clean cut? The table saw worked OK, but the rotary tooling is just making a furry mess of an edge.
Second question: how hard is it to make a punch/die to do this kind of slotmaking? The current batch of bins is just a dozen or so, but I can see a use for more (in other sizes, too).
Third question: other than a full footwide-throat shear, how can the edge-with-tabs be made more effectively? I guess waterjet-cutting is unlikely to fit my budget.
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Why reinvent the wheel.
I used the push and release version of plastic inserts and built baltic birch boxes of all different sizes when I was doing craft shows. They sold like hot cakes.
http://wwhardware.com/catalog.cfm/GroupID/Entertainment%20Hardware/CatID/Media%20Storage/SubCatID/CD%2C%20DVD%20and%20VHS%20Organizers
www.wwhardware.com => Entertainment Hardware => Media Storage => CD \DVD holders

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