I have just started using Mylands 3 step system.
I reccomend you talk to one of the guys at Woodturningz about it.
Jason is the one who told me about it over the summer but I was still experimenting with CA(still am).
If done right Mylands will give you a finish that is ALMOST as good in appearance to a CA finish.
There is a different feel to the pen.
The 3 step system requires cellulose sanding seealer, high build polish and carnauba wax.
I had excellent results the first attempt and tweaked the process after that.
As I said before the guys at Woodturningz can tell you more about it.Tell them Eagle sent you.
BTW
Mylands cellulose sealer is lacquer based(I believe)
After reading your original post I realized your initial concern is sealing the grain.
For this I wet sand all the way through MM using BLO.
I besure to sand Length wise between grains.
You also might try using mineral oil.
After the MM, "Friction" it in and let the pen set before finishing.
(your mileage may vary)