Being a gun nut I started with true oil a long time ago. If you want a satin finish, lightly buff with 0000 steel wool. Your graduations to finer grit were well thought out. Personally, I've given up on 800 or 1000 grit for wood. Maybe I'm wrong, but I can't tell the difference once it's finished. I no longer use steel wool to finish because I can't always get the fine particulates out. There is the wet to dry sanding method to consider also. Wet wood, allow to dry, sand off raised grain hairs with fine grit. Repeat. I liked your butter knife tool very much. The good thing about true oil, and probably linseed oil too, though it is slower drying, is no matter what happens, you can lightly brush another coat on and be good as new any day you like. You can also still oil the wood afterwards. Or wax. (if you use wax, you'll have to remove it before more true oil is applied.)
for my revolver handles, I just use oil. For these khuks, I've been listening to you guys and deferring to your judgement. A chopping knife handle gets a lot more abuse than a handgun generally and I'm betting needs a more aggressive, protective finish like true oil.
I've been considering using Danish finishing oil. Anyone know anything about this?
munk