Hi,
I can confirm that DWM used walnut from Southern-France up until 1917, when they switched to local beech wood for the duration of the war as the result of shortages, as the route from Southern-France was blocked by some trenches
A document on German rifleproduction indeed mentions the oiling and polishing 'einoelen und polieren' of finished shafts as a production step. Not too big a step to assume the same operation was performed on wooden pistol parts.
Below is an image of Mauser's rifle shaft shop, about 1913. Equipment for creation of wooden gun parts was supplied by Loewe, later by DWM and consisted of copying machinery and drilling equipment, often built-up to process 3 to 5 parts in one action. Creation of a Mauser rifle stock took some 55 actions on 50 machines.
<a href="http://forums.lugerforum.com/lfupload/shaftmaking.jpg" target="_fullview"><img src="http://forums.lugerforum.com/lfupload/shaftmaking.jpg" width="400" alt="Click for fullsize image" /></a>
This is an actual Loewe advert, confirming the fact that Loewe developed and sold the equipment for gun production.
<a href="http://forums.lugerforum.com/lfupload/loewe_advert_small_copy1.jpg" target="_fullview"><img src="http://forums.lugerforum.com/lfupload/loewe_advert_small_copy1.jpg" width="400" alt="Click for fullsize image" /></a>