I have made a lot of Kydex sheaths, utility pouches and magazine pouches.
I agree that KnifeKits.com is one of the best places with the best prices for the hardware.
Tools that I would suggest
Rivet press and dies and rivets
Heat gun - this will make it a lot easier than trying to use a toaster oven and is also good for adjusting the final fit.
I use a
band saw to cut out the pieces, but started with a jig saw. Kydex is easy to saw.
Belt sander for final shaping of the edges. I do the final finish by hand sanding.
Wood blocks and cotton gloves for shaping warm Kydex.
Tools that I bought, but don't use too much.
Kydex press - Others use this, but I have found that making a bend at a time and shaping it around the object one part at a time with the heat gun is easier and more precise than heating the whole sheet.
A good place to get Kydex is
http://www.interstateplastics.com/
They have good prices and fast service. They sent my the wrong thickness of Kydex once. I called them about it and the next day they had the right order at my door and although I asked for information on how to send the wrong product back they declined to take it back and let me keep it without charge. They are very helpful on the phone too. The only thing to be careful of is that they have a $50 minimum order or they tack on a below minimum order charge.