Here's how I made the drakescale loincloths and banners for my Fire Drakes.
You'll need a sculpting tool that looks like this:
I'm pretty sure that I bought this from my local Hobbycraft store.
You will also need a clean, flat surface such as a mirror or ceramic tile.
You won't need to much putty, no more than a pea-sized amount for a waist-length cloak or loincloth. Apply a generous amount of water to your mirror or tile - it will stop the putty from sticking - then flatten it out until you've got a flat blob that looks like this:
The putty should be at least 2mm thick, or you won't be able to imprint any detail without the sculpting tool pushing through to the other side.
At this point I'd recommend trying to lift the putty off the tile, because if it's become stuck to it, it's better to find out now than later on. Try sliding a hobby knife under the putty to lift it off the tile.
Now you need to cut it into the shape you want to use (for this post I'm just using a small rectangle):
Now, take your sculpting tool and press it into the putty in the bottom left corner. It should make a V-shaped impression on the putty. Continue along the bottom of the putty until you have a line of impressions like this:
Now you need to make another line. You need to position the impressions so that they're diagonally above the row below, like so:
Continue until you've covered the putty with scales:
Then lift it off the tile, and apply it to your model:
And you're done!