RE: Diluting epoxy?
Make sure the epoxy you are using is labeled "finishing resin". Standard epoxy either won 't set in thin layers to a hard coat or sometimes won't set at all, seeming sticky. I have used denatured alcohol and laquer thinner to thin epoxy, both have worked for me. Also, you want to put the cloth on dry and either brush or squeegee the resin through the cloth, then using a piece of balsa or wood, scrape off as much resin as you can.