Hi David,

Hope I can explain:








What we're doing here is creating a surface, with an edge once Blended between a side of the hole within the existing object to that of a surface representative of the newer recessed surface that sinks below...

(eh... let me simplify):

There's a curve by itself (as a reference) residing somewhat below one of the open sides of the main object.
I Extruded that line as a simple means to create a surface by which I could use its edge to tangent the ("pealed away") Blend off of. The line can be a curve if you wish, and the Extruded surface can easily be another curved surface.
So once a Blend is performed between the upper edge and the (temporary) surface that is below, on the other side - the new surface now swoops to a recessed area.
You can delete that extruded "diversion" surface after the Blend is made.

I may have sounded confusing here: does any of this help?

Not too clear yet. So once you do the extrude, are you projecting the inside curve back on the extruded piece and trimming it?

Well David... you're going to use the Blend tool to create a surface based on the edges of both the edge of the larger hole and the edge of the extruded surface that sits below.
So you'll end up with a surface that launches off of the original object and lands perfectly with the extruded piece, to put it another way.

Yes, the Blended surface will be trimmed to become the inside 'bowl' of the recess.
The Extrude was just a way to "steer" the course of the Blend surface to its "peeled away" shape.