John,
Yeah, your actually right in that with the blend method and a default value of "1" for a G1 the part where the body meets the top of the neck gets all pinched up, so the result you see here or in my previous post is not what you would acheive, I got a smooth transition with a ".5" G1 but its a drammatically different level of smoothness for the edges.
Possibly redrawing the top curve to be much smaller can produce a different result with blend but I have to say I took Michaels model through to a solid and it actually looks like a guitar! I'll poke around a bit more and If I get anything substantial with blend I'll post back. Have fun!