Yesterday, I also set out to cut out the inside heel. I drilled a hole to get a 'soft' edge between the end and top faces, but it didn't really work as intended. Drilling such a deep hole, I had trouble clearing the wast from the bit and I ended up marking the cut a bit. Not a big deal, but a shame nevertheless.
Then the cheeks of the inside heel was cut off and cleaned up by chiseling away to final dimension; A good practice for the outside heel job. The outside heel contour was cut on my bandsaw using a 1/4" 6tpi positive claw Timberwolf blade.