I just did mine but didn't cut as much as I did fold. I simply removed a small wedge shaped piece from the back and made a cut inside the fender well. Then I started messaging the fender from the inside with a 4lb BFH and as you collapse the inner part the outside folds very nicely along the body line. I have done both of my XJ's this way and works/looks really nice.
PM me I can get you pics and walk you throught it depending on where you live you could swing by and take a look at mine. (E470 and Smokyhill)
Zach