Just to clarify the original question- Red78445 has an instrument that (presumably) already has a finish on it and wants to enhance the finish.

Some finishes cant be applied over another type (i.e., applying boiled linseed oil over a cured shellac finish). If it was a specific type of finish, I would go with a newer application of the same on the prepared surface.

If its just a 'spit shine', I think some furniture or paste wax might be the best option. There are tons of suggestions available in various woodworking/luthier forums.

On the website, entitled "Luthiers Mercantile International", I did find the following info: 

•  If you are working with minimal equipment and working space (possibly a small area or table in your home) your instrument can be effectively finished by either brushing water-based lacquer, French polishing shellac, or wiping on an oil varnish.  Each of these finishes is non-hazardous and can be safely applied in your home with no more equipment than brushes or cotton cloths.  The oil is the absolute easiest to apply, brushing the water-based lacquer is slightly more involved, and the French polishing requires the most practice and skill.  The resulting instrument finish from any one of these materials can range from merely adequate to true professional level depending on your experience and skill.

As far as the tung oil is concerned, I do use Formby's low gloss tung oil finish; which is not 100% pure. I take the surfaces of the dulcimer to 320 grit. I then use a cloth pad to apply 3 to 5 coats, depending on how it is working with the particular wood I am using at the time. I lightly scuff the surface with 320 between coats. Final is with #0000 steel wool and a wax polish. 

I would like to do that experiment sometime, but not sure my ear is attuned sufficiently to tell a difference.  Nice instruments you are making.... :)

No, actually, I have done it with other features, but not comparing oil to lacquer.  The times I have used oil, I was just not happy with the results.

That is a good suggestion Matt.   That would be the only way to know for sure, of course both the top, bottom, and sides would have to be out of the same piece of wood, on both dulcimers.  Have you already done sibling dulcimers; one with tung oil and one with another type of finish?  Is that how you know oil finishes dampen the sound?

When asking such a question, I always build sibling dulcimers.  Cut the sound board and sides out of the same piece of wood.  Then finish one with tung oil and the other with lacquer or shellac.  That should answer the question.

I have been using tung oil exclusively and am not aware of any sound 'dampening'.  There are some posts on the web that allude to a slight dampening effect, but i cannot find any serious research addressing the dampening concern. If anyone knows of such a study please let me know. Maybe my ear is not sufficiently 'tuned' to notice any 'damping'.  

I am not a fan of using oils on any part of an instrument.  I find they soak into the wood and deaden the sound.  As Bob Schuler said use wax.

Personally I would not use linseed oil: 

Wood finish [ edit ]

When used as a  wood finish , linseed oil dries slowly and shrinks little upon hardening. Linseed oil does not cover the surface as varnish does, but soaks into the (visible and microscopic) pores, leaving a shiny but not glossy surface that shows off the grain of the wood. A linseed oil finish is easily scratched, and easily repaired. Only wax finishes are less protective. Liquid water penetrates a linseed oil finish in mere minutes, and water vapour bypasses it almost completely. [5]   Garden furniture  treated with linseed oil may develop  mildew . Oiled wood may be yellowish and is likely to darken with age. Because it fills the pores, linseed oil partially protects wood from denting by compression.

What is the original finish on the instrument?

Just polish with a good furniture wax. Oil might gunk up over time... Robert

I just bought this dulcimer guitar used (but very new). I am wondering since it is mahogany would rubbing it down with boiled linseed oil every so often help it stay new or kill it instantly?