Make sure your printed image will fit onto the key chain. Trace around image to cut out the shape.
Apply Mod Podge to wood.
Spread evenly. You want a good coat of Mod Podge
Place image right side down onto wood. Le it dry for at least two hours.
Dip you finger into some water and start rubbing the paper. Keep rubbing the paper off until the image shows through.
When image is shown through you can use a small towel and wipe off the rest of the paper.
Once all the paper is wiped off the image will remain on the wood. Cover with one or two thin coats of Mod Podge to protect.