tmickley glad it worked for you.
L6 your method is good to (it's the warm water and quick drying that do the trick) but the added heat will harden it to a greater degree.
Neatsfoot is also good but it doesn't really make the leather water resistant(helps but not for heavy use although I'm sure I'll get some arguments and BTW nothing I've found so far makes leather waterproof).
No I'm not the final word by far, but I've been studying leathercraft for 40+ years plus I've carried leather in all kinds of weather and all kinds of conditions (I've worked as a packer and as a logger so I reckon I have some experience.)
Here are some suggestions (for real using sheaths - art pieces are a different ball game):
A good cleaning with saddle soap should be on anyone's agenda and depending on amount of use/conditions 2 or 3 times a year is sufficient.
I then use Lexol Conditioner. It is hydrogenated oils that "feed" the leather without leaving a residue. I've only recently tried out the new NF neatsfoot oil and it looks good as an alternative but I haven't used it enough to say for sure.
On new leather I usually finish up using Leather Balm w/atom Wax. I soaks in and gives a real nice sheen. Neatlac is a leather "lacquer" and after a while it shows all the scratches and such. It's hard to refinish too. Fiebings Tan Kote is also good and gives areal nice satin sheen. Leather Sheen and Super Shene also work OK but put to much of a high sheen on for my taste.
I'm not sure who started the wax oil dip, but I find it messy and unnecessary. For a similar finish without the fuss and muss I use Montana Pitchblend
www.mtpitchblend.com It can also be applied over any of the previous finishes and is one of the best weather resistant finishes available.
Cutting through the side of a sheath is a major concern of mine. It's one reason I harden the leather and don't use heavy oil finishes. The heavy oil finish can soften the leather too much and make it easy for a sharp blade to pierce the side and other more important things. The wax/oil will stiffen leather but it doesn't really harden it like the heat drying method which has been used for several thousand years.
One last hint: after you dye a sheath make sure you buff it well with a coarse cloth. Leather dye is powder ins suspension and after it drys a thins film of the powder gets left on the surface. If this film is not removed completely the dye will bleed through ANY finish and rubs off. A major non no.
Finally experiment, experiment, experiment. One mans... and all of that.