I can't believe I missed this site!!!
www.museumreplicas.com is top notch! I've seen their stuff, it's great.
www.badgerblades.com has gotten good reviews as well. They have an awesome guarantee on thier stuff, and I hear it's really great.
As for damascus, well there is decent modern pattern welded material available. (My mentor knows how to make it, I may learn to ) however there is some "damascus" available that is junk, and will literally fall apart in your hand. I think the key is the price, if you can get a damascus knife for $5 chances are it will fall apart. Good pattern welded (Damascus) steel goes for hundreds of $$ usually.