History of mountain dulcimer
General mountain dulcimer or music discussions
I'm not much of a historian.
But here in my area a lot of Churches didn't allow music of any kind until the late 80s, early 90s. With the exception of Church of God, Pentecostal Churches and Holiness Churches, the only churches that allowed music had a piano and that's it.
To this day the Primitive Baptist and Old Regular Baptist still don't allow music.
However, some of the best musicians in the area went to most of the churches that didn't allow music.
For instance: well known bluegrass player and singer named Ralph Stanley was of the Primitive Baptist denomination that doesn't allow music in church.
I personally wouldn't put much stock in the notion that the early dulcimore was played in church very much. Or any instrument for that matter if we're speaking the 1800s in rural Appalachia.