Studiodog,
You should be able to smooth it down with 120 grit just fine. This stuff sands real easy, and should flatten out pretty nice with a long sanding board.
I would thin about 10% with Acetone. The material should spray out real wet and smooth. If the material is coming out too dry, then either the material is not thinned enough, or your fliuid tip can not handle the thick material. You will want to turn your fluid needle wide open, and run just enough atomizing air to get a good pattern. In a standard high presure gun, I usually run almost 50 PSI to get the lift necessary to pull the heavy material. When properly applied the finished surface shold be smooth with almost no orange peel. When blocking, just remember, allways use a hard block of the longest size you can to get the straightest panels. I do about 75% of my blocking with a 16" sanding board. Always sand at a 45 degree angle to the length of the board, to avoid making flat spots on curved surfaces. If your body is pretty wavy, you will probably want to shoot about 3 coats, and then block till flat with 120 or 180, and then shoot another coat, followed by blocking with 320, followed by 600 grit wet sanded. Don't be dissapointed if you find yourself sanding through to bare glass in spots on the first couple of blockings. That is what blocking is all about, finding all the high and low spots.
Regards, John McGraw