Anchor Chain
 

Here's a rough step by step for carving a big anchor chain. It can also be tried on a smaller piece of wood.

End view of your log, cut out the shaded parts,
you'll be left with an X.

Then lay it sideways, it should look something like this.

Make staggered marks like here, by then you'll start to see it.
 

Then start notching, it's pretty simple.

To add the anchor (or anything) clamp one side of the end link to something, and smack the other side with a sledge hammer. It will snap off rather jagged, but will actually glue back together nicely.
The Finished Chain.