"Euclidean constructions by ruler and compass are equivalent analytically to solutions of a series of linear or quadratic equations."
In which case 1 is a solution to $x^2=L$ and 2 is a solution to $bx=aL$ both have to be possible. ... How? that's another question altogether.
The tradition way to do 1)
is to make extend L by a unit and construct a perpenduclar at the point where we began the extension. As the midpoint of the line L + 1 long, create a semi-circle with radius (L + 1)/2. Mark where the circle intersect the perpendicular we drew. The length to the base of the perpendicular is $\sqrt{L}$.
2) Extend your line b-fold so that you have a line of length $aL$. (Just copy it endpoint to endpoint $a$ times.) Then at an endpoint create a line $b$ units long and mark each unit. Connect the to endpoints and call the resulting line M. At each unit mark construct a line parallel to M. These lines will intersect the line that is $aL$ units long. The points of intersections cut the line $bL$ units long into $a$ equal lenght portions. Each portion is $\frac ab L$ long.
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My original stupendous error on constructing $\sqrt{L}$ got me to thinking how could one figure this out without being told and I realized:
As $\sqrt{L}$ is a solution to a quadratic equation we must involve a circle.
Let a circle be described by $x^2 + y^2=r^2$ where $x,y,r$ are all constructible values.
We want, say, $y = \sqrt{L}$ so $x = \sqrt{r^2 - L}$. We need to find an $r$ were this is a square of a previously constructable value. It'd be circular (pun unintended) if $r$ involve $\sqrt{L}$ so lets assume $r$ is something linear. i.e. $r = a + bL$.
So we need to have $r^2 - L = (a+bL)^2 - L = a^2 + (2ab - 1)L + b^2L^2$ be a square of constructable values. As we don't really know how split $L$ into $L = MN$ factors (that's pretty much the point of what we are attempting to solve) the only way $a^2 + VL + b^2L^2$ to be a perfect square is for $V = \pm 2ab$.
So $2ab - 1 = \pm 2ab$ or in other words $ab = 1/4$. The simplest and must symmetric solution would be $a = b = 1/2$.
Then we have $r = (L+1)*1/2$, $x = (L-1)*1/2$ and $y = \sqrt{L}$.
Now the construction seems apparent. If the radius of the circle is $(L + 1)*1/2$ the diameter is $L+1$. So take the line of length $L$ and extend it by one unit. Take the midpoint of that line and construct a circle with center at the midpoint and radius determined by the endpoint of the extended line.
$x = (L-1)*1/2$ is the distance from the center of the circle to the end of the original line of length $L$ just at the point where we extended it by a unit. Construct the perpendicular to the circle and that height is $y =\sqrt{L}$.