I've done the Dremel flex shaft thing before, and although it sort of works, I've found a better way. There are all sorts of problems with the flex shaft- the bearings aren't that rigid, there is a bunch of runout, it uses a little 3 jaw chuck thing that increases runout even more, it takes 10 minutes to attach (and then remove) from your dremel, the dremel has poor control of speed, low torque, etc.
I've found a much better way to do it. Get a Proxxon 38481, a 20mm shaft collar from McMaster (p/n 57445K73, around 6 bucks), and a steel bar 0.5"x0.75"x4.5" Weld (or perhaps bolt) the bar to the shaft collar, and you can quickly and securely attach the proxxon to your toolpost in either configuration.
Since you can quickly unbolt the proxxon and use it for normal things (and I've found it to be a lot nicer to work with than a dremel) it's a cost effective way to have a light duty toolpost grinder.
Hope this helps,