Wet-molded leather works very well indeed. My own sgian and sheath (made for me by someone here at Xmarks) stay firmly in place -- though I'm sure the fact that I use garter ties rather than flashes helps with that. The knife essentially "snaps into" the sheath, yet draws from my hose with no "drag" noticeable. You can see how it was done, here:

https://www.facebook.com/media/set/?...1&l=86ea3c07b3

As far as doing your own wet-molding is concerned, I once made a wet-molded thick leather half-liner fitted to the inside of a steel broadsword basket. Instead of using water, though, I used isopropyl alcohol (aka "rubbing alcohol") -- wets the leather just as well, and dries more rapidly than water with no worries about rust. After the liner was "set" and dry to the touch, I baked it at low heat for a while to really harden it. (One doesn't want to get punctured through the basket, don't you know!). It worked very well.