There's a blacksmith/crafting station behind that abandoned store in Cyseal that has an infinite use whetstone wheel, anvil, and furnace. You can always use that whetstone instead
What he said, I've still not yet even seen a lootable one however have heard they do drop so must be rare.
But they function no different to the static ones at crafting stations so just use the one mentioned above and maybe you'll get lucky again at some point.
I thought you need a whetstone in your inventory to be able to use the Whetstone wheel.
Not required to use the static tool, you can just drag item from inventory / ground to the whetstone