I was always afraid to do the egg collecting, especially since I experienced plenty of heartache when finding that tiny cat wrapped up in a shriveled piece of milkweed.
A newbie here at work collected eggs and did it the way your describing, so I gave it a shot this year. It's pretty painless! I did the same thing, cutting only the part with the egg, laying them on damp paper towels & putting a the lid on the container. I'd check on them a few times a day. Once hatched, I'd move them to another container, keeping the leaf on a damp paper towel as well. Once they become bigger and start eating more, I stop the damp paper towel and cover my container with tulle. I collected about a dozen this way this year (I wasn't taking any chances losing them to wasps) and have had no losses. As a matter of fact, they're all chyrsalids at the moment.

I did something similar with 2 eggs on a leaf. What I did was put a cutting of milkweed in a small vase, then I perched the dried up leaf "egg side down" on the flower cluster of the cutting. Even though the leaf is dry and curled up, the little cats will be able to find fresh food. The reason I put it on the flower cluster is that was the only way I could get the little piece of leaf to not fall off :)

I have been raising monarchs for 5 years, but I have never cut the eggs out. I always used a floral tube and kept the leaf hydrated. But cuz I found so many all at once, I wanted to save room. U dont think keeping the piece of milkweed leaf damp will hurt the eggs???? thats what I was wondering. I know if the leaf shrivles up, the little cat might not be able to get out. I also put the newly hatched cats on the most tender milkweed. :) they r so cute!!!

I always put the small cutting, with the egg on it, on a fresh milkweed stem, with leaves & flowers. I like to keep the stems hydrated with a very small (one inch diameter) plastic cup. The cup sits in the bottom of a glass jar, so the stem is propped up. When the monarch cat emerges, it will first eat the egg shell, and then explore, until it finds the fresh milkweed. The main thing to remember is that first instar monarch cats have to crawl around on their own, any attempt to pick them up will result in certain death.

Good update for you: One of my eggs on the little dried up and curled up leaf had hatched this morning, and I was able to hold a fresh leaf next to it and he crawled on. When I got home tonight, the other had hatched, and the leaf was so curled up I was worried, but there he was sort of standing on the edge looking around :) I repeated the process of holding a fresh leaf next to him, and he climbed on too.

In the future, what you can do is take a margarine tub or something similar, poke holes in the top with a nail, then fill it with water to the brim. Pop the lid on and you can poke single leaves into the holes. Snip off a tiny bit of the end of the leaf before sticking it in the hole. It will stay hydrated and you can fit a lot of single leaves on one container. I like to use clear containers so I can monitor the water level - my current one is an 8 oz Feta Cheese container :)

I have to add that it really was cute to see the little guy standing on the edge of the leaf, looking for fresh food, sort of like someone on a sinking ship. Caterpillar mom came to the rescue! I just checked them again, and they are happily munching away.