Ive taken the 5 gallon bucket of water a little further. We bought a vacuum cleaner called a "rainbow" that doesnt use bags or cyclonic action to trap dirt, it draws through a tank water and therefor doesnt clog at all or lose suction. What I did was take some misc parts from rockler and a 5 gallon bucket and lid from a big box store.
Mounted right under the belt grinder will be a "tabletop dust fitting (
http://www.rockler.com/tabletop-dust-fitting ) with a short run of hose that goes to 5 gal bucket lid. the same fitting will have a smaller pipe going down to bottom of the bucket. On the other side of the lid is another fitting that you attach shop vac hose to. Then you fill bucket about half full of water. The inlet from dust fitting goes below the level of the water and the shop vac side does not which should create enough vacuum in the bucket to draw air in thru the water to trap particles so the shop vac filter doesnt get clogged.
Im still putting it together, but ill try and get some pics when done.