Another dory builder and I were discussing this and we both thought it easiest, and would look fine, to simply sand down the tip of the inner rails to kill into the breasthook and knees (knees have same issue).  Also I wanted the inner rails to be flat to the outer rails.  As you look around and find pictures of other dorys I think most builders do the same thing.

Coincidentially I glued in the inner rails in my dory this week and purposely clamped the end of the inner rail down a little and the inner block a little below that...and then sanded the two to align to the breasthook and knees.  It worked great...Be careful when you sand the tip of the rail sticking up where it kills into the breasthook because the breasthook is plywood..dont want to eat into that and expose a layer in the plywood.  Here are some pictures you can look through.

https://picasaweb.google.com/114717787929554738224/BuildingWoodenBoatCLCNortheasterDory?authkey=Gv1sRgCKCBzczm_aKs2wE#5993083179265338642

Curt 830/997-8120

thanks for that input, and especially the pictures, which help a lot.

As a follow up, I am frankly somewhat intimidated by the joining of the rails into the bresthook and knees. I havent done the "kills" thing before. do you have any tips on doing that? it looks like the sort of project that you only get one shot at and have to get it right up front.   Did you make a template and use that for both peices to join them?

your overall rails look great by the way, hope mine turn out as well.

David

   I liked this tech tip below the best....good pictoral of how to cut the inner rail..first set a clean angle on the breasthook, cut it to finished size (Note I cut mine back a lot) using a 45 degree cut because it's easy for the rail uf you have a cut off saw, then cut the inner rail, but.sneak up on it, use a cut off saw and make a lot of cuts taking only a sixteenth each cut...if you want get me your email ID, I can send you a Word Doc where I accumulated pictures and tips about inner rails..oh and I didnt use a japanese pull saw like it says below...just did lots of micro cuts on the chop saw at 45 degree

Curt 830/997-8120 [email protected]

   thanks, that makes sense. just scared I guess and I have to just forge ahead.  Which is sort of th ewhole point to taking on a boat building chalenge in the first place. my email is [email protected] and would greatly appreciate the tips you have accumulated.

David

I routed outed the outwales to ride over the plywood edge so was able to continue part of the inwale over the breast hook. This kept the surface flat. Hopefully the pictures posted and make this clear. 

Barry

wow, that looks sharp, but will have to wait to do that on my second boat, since my gunnels are already attached on this one. I have only just started to figure out what my router can do, so many things are doable suddenly that are more professional looking.