If you don't want some color-shift difference, you've really got to remove all the factory finish from the headstock across the whole flat surface.
Sanding out just the logo and therefor gouging the wood down to the level of the wood below it - which in most cases is a silk screen process from the factory - will set up dissimilar tint of the head not to mention a trench that will be very hard to fill and hide,.
Do it right and go all the way on just that one plane of the head, as you can blend the face of the showing surface. The edges and other side of the head won't need to be touched at all.
I'd not recommend putting the decal on bare wood, but instead apply one or two clear coats of whatever product you want to use, so the decal won't discolor the wood underneath it. It's not just the water of the decal, if you seal the wood with the decal and then put clear coat over it all, it will show as a different color.
The process, simplified:::
1) strip the whole top of the headstock on just that one surface also removing the old logo using a sanding block!!!
2) put at least one - but more like two coats of clear on headstock first
3) apply decal - let dry (although I have done this in fifteen minutes later), making sure that there are no air or water bubbles under the decal.
4) apply four or five more clear coats
5) sand with 600# wet/dry sandpaper using a sanding block- BE CAREFUL HERE TO NOT CUT TO THE DECAL!
6) apply four or five more clear coats.
7) repeat No 5 above, but don't cut as deep this time.
8) apply three clear coats - let dry overnight
9) using 1200# wet/dry sandpaper, finish sanding to a smooth-level surface using a sanding block!!!
10) place the headstock so that the surface you are coating is as flat as possible - this is important!
11) apply one more clearcoat, this time a rather heavy coat until you can see it actually floating on the surface. Stop when you get a nice shallow puddle. This takes careful observation!
12) let dry overnight and maybe another day depending upon atmospheric conditions and temperatures.
13) wax heavily with a pure CARNAUBA paste wax - be careful of the spelling of carnauba - it is NOT CARNUBA, as that is a patented process of making an artificial carnauba bean wax.
If you're gonna do it - do it right.
BTW: I like the MinWax spray Spar Varnish:::
...... as it sets fast and resists running or dripping plus it dries really fast on a warm day. Another big plus is that you can recoat it days, weeks or years later with no blistering or crazing problems.
My planned mods: Gotoh 201 bridge (black); Duncan SPB-1 pups; Schaller BML Tuners (black); black knobs, pickguard screws, string retainer, strap buttons; Rotosound RS88LD black flatwound strings.
