This is a pretty neat idea. How hard would it be to replace the wood and try again. To stop the chipping you saw, you could have done 2 things, cut the whole half way on one side, then half way from the other, or clamp a peice of scrap wood over the whole you were cutting, so you drilled into that wood rather then just push out from the inside.
i would give it another go, and try to re space the buttons properly.