Just did a little digging and found out that many dulcimers from that era were set to play in DAA or CGG and with a noter. The belief was that when a noter was used the tension on the strings would compensate for the flat ring. You might check with John Huron at Noteworthy Instruments as he worked with Bob Mize...he can probably tell you more about why the frets were set to sound flat at 7 and often times 1 than I can. Since your question has got my curiosity up I'll keep looking around some of the back issues of DPN and see if I can figure it out. I read a post a bit ago that said that every Mize dulcimer he ever played was flat on 1 and/or 7.
Update: I just found a thread on Everything Dulcimer that discusses this issue.........check out the posts under Robert Mize Authority? From what I can discern the root note was tuned at the third fret with adjustments made for string gauge, bridge height and so on...........Robin Clark has written about this too.....when you figure it all out post what you have learned because old codgers like me are a little bit fuzzy on all this stuff.
updated by @salt-springs: 02/15/16 11:52:07PM