When you need a higher level shard than what the Merchant sells (Shabby) then it's possible to make your own. First, visit the Merchant and buy the necessary Shabby shards.
Rough - 3 shabby
Blemished - 9 shabby or 3 rough
Common - 27 shabby or 3 blemished
Once you have your shabby stones, head to the Jewelcraftsman and click on Combine in his list. A window will come up that looks similar to this.
To make a Rough shard for crazy stones, you will want to click on the Elmt button (shown by the number 1
Find the type of stone you want to make and click on that (shown by the number 2
). It will show you at the bottom how many you need to make that type which for Rough is 3.
Click on Start to make the Rough shard (shown by the number 3
If you need to make Blemished, follow the steps for Rough to make 3 Rough shards, then once again only chosing to make Blemished using your 3 Rough shards.