Michael Rugg is one of my favorite players, too. There's also a guy named Mike Anderson (has is own website somewhere) who records a lot of children's songs and such. He plays about a dozen instruments but is actually a good dulcimer player. Among "older" music (not REALLY old), Richard Farina and Bob and Evelyne Beers also used dulcimers to good advantage.

You can learn to play almost anything, but if you're just starting, pretty much anything that is arranged for clawhammer/frailed banjo will work well, once you have the tuning figured out. Not surprising since both instruments are heavily rhythm-driven.