You pretty much hit the nail on the head describing the beginning steps to Agrarian Skies. I didn't use flint for a hatchet though. I noticed that bone had a higher and the same mining speed, so I sacrificed two pieces of bonemeal for the axe head instead. Instead of making a regular furnace, I made myself a slab furnace from Tinker's Construct to start off with and saved myself a whopping two pieces of cobble. I also just ended up making a simple drop trap straight away instead of a dark room. I just constructed a dark room about 45 blocks above a platform, cut a 3x3 hole in the bottom, lined the hole with trapdoors and voila, drops galore with no punching required.snip
Somewhat unrelated, the rope ladder from Open Blocks is great for getting underneath your island. It goes all the way down to the void and you can place blocks off of it.
How I have 'derped' up:
I cut all the leaves off of a tree using a pair of shears and then proceeded to chop away at the bottom log with my TiCo lumber axe... right next to it... standing on a one block thick platform... made of planks...