Cutting the groove I think you already have figured out. I think it's getting the ends rounded that maybe has you stumped. If you are making a bunch of these I would make a long rounded tenon style piece like Stick suggested and then use a 3/8" radius bull nose (same curve as your straight bit) to round the ends and then cut slices off it the thickness you need.
Someone I consider a master woodworker once told me that a master woodworker is not someone who never makes mistakes. He is someone who is able to cover them up so that no one can tell.