I just did what Jaco did, filled in the frets with PlastiWood wood filler, then coated the whole neck wih the kind of epoxy acrylic that you see cheesy clocks made from, they sell it by the gallon at craft stores if you only use 2/3s of the hardener , it is much harder, then sanded the hell out of it. I used 5-6 coats., put masking tape on the sides.
It sounds great with round wound strings, and they don't eat the fretboard that way, but you have to press HARD.
ANnnnnd as I re-read your post I see you meant RAISED sawdust epoxy frets. nevermind, maybe the stuff i mentioned could be used, but you would basically have plastic frets. But hey, people use plastic nuts, why not?