(First try at answering went into the cyberdump.)

The mountain dulcimer hits you with a double whammy when recording: it is very soft, but the sound doesn't bloom until you get about 3 feet away from it.
So my suggestion is to try recording, with the mic about 4 feet back, in a small, live room. Like (no kidding!) the loo.
If that's too much organic reverb, try moving to a stairway, or maybe drape some blankets over the tub to damp it down a little.
You probably won't be happy with all direct sound, like you'd get from close-miking or in a soft-furnished room like a bedroom or living room. You'll want at least a little room ambience (not just stray noise, I mean the subtle echoes and frequency tweaking the room does to the sound).
Experiment. Good luck!
-Glenn
PS don't forget to turn off the #@*! phone. :-(