Juanita Baker has a whole book called Blues & Ragtime for the Mt. Dulcimer - or some such (I'm at work and the book is at home). It's all fingerpicked, and she does a lot with a 4-string equidistant set-up with the two melody strings tuned a 1/2 step apart to provide the accidentals. Some good stuff in there.

John & Heidi Cerrigione (Doofus) also have tabbed out some blues for Mt. Dulcimer. Heidi uses a 1 1/2 fret a fair amount. I had Dwain Wilder put one of his magic "Flexi-Frets" on my dulcimer in the 1 1/2 and 8 1/2 position so that I can add those frets when I want to play crazy stuff, and go back to a traditional fretboard when I don't.