Those knives are somewhat rare. If you try to clean it as you describe, you will ruin any collector value.

Dremels and knives do not mix!

I would contact Buck and see if they will polish it for you for a small fee.

http://www.buckknives.com/index.cfm?event=company.contact

In good shape, a Buck 107 with the original sheath (also in good shape) can be worth about a hundred bucks.