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Measure 8" down from the ceiling and snap a chalk line all the way around the room.
Cut the base molding to length and nail it at the underside of the chalk line.
Cut enough 2" wedges to go all the way around the room, placing them every 24". Use a nail gun to attach the wedges to the base molding. Make sure they are even with the top of the base molding.
Mount the rope lights along the top of the base molding using the plastic hangers sold with the lights. This is done with a screw gun and 1" screws.
Each segment of lights has a plug to add on successive lights to reach the desired length. Rope lights come with a cord and plug. To wire the lights to a switch, consult an electrician.
Test fit a length of crown molding against the wedges, then insert one of the inside or outside corner blocks. Once you're sure it fits properly, nail it in place with a nailer.
Continue around the room by butting another long run of molding to the previous one.
Use wood filler to fill the nail holes. Once the putty dries, sand then paint.