Tom,
I think you are correct. After I mentioned the holes to sword-fish, I've spent the night looking at swords on various websites. I don't think this sword has deep enough sockets to have had the eyes inlaid. These are very small holes and there's detail carved around them.
The blade etching is along the spine of the sword as well. It's nice detail work. I can get more detailed pics of the etching tomorrow if it would help anyone.
