Chuck,
I have now almost completely changed over to diamond wheels on my surface grinder, so normal wheels for normal materials, diamond for carbide and other hard stuff.
The problem you have won't be the density or size of the diamond, that is just like selecting your grit size on normal wheels. The smaller the number, the bigger the diamond grit.
Your main problem will be dressing it to be perfectly true.
The correct way is to use what is called a brake dresser, a very expensive bit of kit normally. A new one like mine could be well over 1,000 bucks.
I searched on ebay to get one before I started to build up my diamond wheel collection. After waiting for nearly six months, one came up at a reasonable price, the chap didn't know what he had, and I got it for about 50 of your bucks, and it came with a brand new spare wheel.
The way it works is that it is brought into contact with the wheel face, and the diamond wheel starts it turning. As it turns, a centrifugal brake comes into play and delays the bonded stone, and so the diamond wheel wears itself away and dresses true on the holding back normal bonded wheel.
Supposedly there are other ways to dress diamond wheels, but it seems the most efficient, accurate and best method is a brake dresser. The other ways are a little hit or miss.
One tip I have picked up, once the diamond wheel is correctly trued and dressed, you don't take it off the machine until you really have to. Otherwise you will need to true and dress all over again, and as you know, there isn't much meat on them in the first place, so continually dressing will soon render them worn away.
I hoped this has helped a little.
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