See you got your answer...if you have a problem with the buttonhold waving after you cut it...use some cutaway stabilizer when you stitch the buttonhole...on the wrong side of the fabric...then cut away the stabilizer close to the stitching..it will help keep the buttonhole flat when it is cut open...
I'd just leave a little gap in the seam - but then I'm lazy!
Rescuer has the right idea. You make the buttonhole before you stitch down the casing. You could also make two as suggested, one near the top which when folded down would open to the inside and one towards the bottom which would allow you to pull the cord out through towards the front. Good luck!
I think you just want the buttonhole on the one side. make it before you roll the casing. You may want two buttonholes so each side of the drawstring has its own slot -- depending on the pattern you are using.