Chuck, I was thinking about your post last night, if you look at the straight lines in my second photo above, the painted version, there was no tearout what so ever on those lines, which went all the way around the piece. There was also some smaller text with the same font below the shown text with no tearout. So I think we can probably conclude it is the grain indeed. I recut that text last night with a different 60* bit and used a start depth of 0.01" to see if it might clear someof it up. It did, but it left some new tearout places, too, although not as bad. Both bits are fairly new and sharp.
Burkhardt, thanks for the examples. I was thinking of some other pieces I carved for Christmas gifts. They were from a different piece of redwod, which looking at it last night is noitcably darker and has much finer grain than the one above. I also cut them with the grain running vertically instead of horizontally. They were both a large font cut with I think a 1/4" 90 bit. I'll have to find the pictures, but they turned out perfect. So maybe you're on to something with your last sentence. Lol, maybe if I rotate my design 90* and turn the board with the grain running vertically it will help. :/
Btw, do you have a link for the ebay bit? I buy some of mine there with good success.
ShopBot Desktop 24x18
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VCarve Pro 8.5xx
ScottP Super Deluxe Spoilboard