TheSamba.com :: View topic - My new 71 Super
Scroll down about 1/4 of the way. You'll see the fender of my Karmann Ghia and the giant dent and chip that it got when a grinder fell on it. A friend of mine fixed it for me, in my garage, using my tools.
We used a small HVLP touchup gun. He sanded back and feathered the repair out until it was smooth. Went and got some good body filler, and put a few coats of it on a little at a time. He slowly sanded it back until it couldn't be seen, then put a good filler primer on it. He sanded it again with 320. I had some paint mixed that was a close match, and we masked off anything we didn't want over-spray on. He painted it, a few thin coats at a time, letting it flash in between. After it cured for a day he wet sanded and polished it.
The repair is all but invisible. If the paint matched a little better it would be completely invisible. The Ghia is a Single Stage paint, which makes it easier, but the process is about the same. Just make sure your air is really dry when you paint and you'll be good to go.