Why don't you use real turf. Just over lap it so it goes into the water. The grass underwater will die but you can always plant marginal cuttings into the turf.

Why not just cut off all the butyl liner that isn't required? .

If you then plant evergreen ground spreading perenials such as campanula, perennial geraniumms,marjoram, thymes and many others close to the edge of the liner the plants will quickly cover the butyl still left showing and cascade into the water giving a really lovely natural effect

Here are two photos of my pond showing what this method can look like

http://www.flickr.com/photos/31559373@N00/537528733/

http://www.flickr.com/photos/31559373@N00/7297154006/

I was going to say cut it off too, though its quite to hard to visualise it properly with it being upside down.

Thanks for all the suggestions. My pond isn't upside down, Steragram! All of the water would drop out!
I couldn't get into Flickr following your link, Anchorman.
If we cut the butyl off, what would hold it Up? Would the weight of water hold it in place?

Canalhopper your pond might not be upside down but the photo you put up is! Turning my laptop upside down it looks to me as if the pond edges drop away steeply rather than being sloped and am I also seeing a net right across the pond with plants coming through it? I'm not sure how you'll anchor the liner if you cut off the excess - is there a reason you made it lower than the rest of the garden? Could you not simply fill the pond up more?

If the photo is indeed right way up I can't make sense of it as the water plants look as if they are growing downwards. Did you take the photo looking straight down? If so one taken from the side might be helpful. If you look at that little thrift (or drumstick primula?)plant in the border it certainly appears wrong way up. Could you try that please?

Thankfully I have a laptop Stera the image is definitely upside down! I 'think' it is a thrift plant rather than Primula denticulata... I still question how the liner will stay in place if cut. We put soil over ours to hide the edge.

The spare liner could be tucked under the spare soil . and then this will give you a wet area for planting bog plants.
lift the liner until it is 6-9 inches from the actual edge of the pond, then dig the soil out to about 9-12". fold the liner down and refill with the excavated soil. This area can then be planted with moisture loving 'bog' type plants. as they grow they will soften the edge of the pond. You can then place your rocks as you want them. the weight of the soil will stop the liner slipping back into the pond.

I agree with Mg, the pond looks as if it's short of a foot or so of water, just fill it up, problem solved, Derek.

I'm sorry the photo is upside down for everyone else.....on my ipad it's the right way up! I' ll try reposting it and put it on upside down, to see if that helps. Could someone tell me if it appears the right way up to the rest of the world?!
The reason the pond appears to be below the level of the garden is that our garden slopes all the way down from house to boundary, so the bottom end of the pond is actually level with the ground. this is what has caused the problem really.
Yes it is netted against herons--I posted a question about the heron a few weeks ago. At the moment, the net is temporary whilst we decide on a more permanent protection.

Still upside down Canalhopper - I know there are problems putting photos onto GoY from an iPad, I've never tried...

I uploaded it from my imac this time--is it the right way up now?

Yup it is... I would still recommend you fill up to level with the grass and can't understand why you didn't.

Now the photo is right way up it's much easier to understand.

If the butyl goes under the stones and up a bit behind them I'd just fill the pond up another 6 inches or so

The bottoms of the stones should be at least an inch or two under water to make it look natural

Then trim back any remaining liner above the water level ( the large rocks will hold the liner in place) and plant ground spreading plants close to the edge of the liner and they'll soon cover the liner completely

Thanks for all the help--plenty of food for thought!

That ledge would hold a nice basket or two or three, with things like water irises and marsh marigolds. They would be very happy with their feet in the shallow water you'll have if you fill up the pond to overflow the angle as the others suggest. And this may encourage house martins or swallow to build under you eves if they are suitable, because they need the mud!