Cleaning the Handle
After initially cleaning it with mineral spirits, I clean out where the blade inserts by using a piece of sandpaper on edge to remove as much of the rust in there as I can:
Cleaning it also shows a small crack leading from on of the nuts. Using a piece of paper, I work a bit of glue into the crack:
After getting as much glue into the crack as possible, I take some 220 grit sandpaper and work the area around the crack, filling the still wet glue with sawdust from the surrounding wood. Afterwards, I take some 150 grit sandpaper and sand the entire surface of the handle, taking care not to sand too much around the delicate carvings.
When I finish sanding, I apply a couple coats of boiled linseed oil to the handle:
I often like boiled linseed oil for tool handles, it just feels right in your hand, and won't flake off like a varnish will given time. A light coat of shellac afterwards can help a bit, too. Notice I didn't do any more "restoration" on the handle than I had to. There's no point in worrying about things like dark patches, as they don't affect the performance of the saw. As long as you've cleaned it well and repaired any structural defects, the saw will be fine. Besides, I like the patina that an old tool has, rather than trying to make it look like new.
Filling cracks... (added 05-05-05)
This applies to wooden planes, as well, but since we are discussing saw handles...
There are 3 kinds of cracks. The most minor cracks, the ones that just appear as "lines" on the wood and are a result of the wood drying out over time, but aren't structural; larger cracks that have opened up a bit, and are more than the simple lines mentioned above, but don't hamper the wood in it's intended use structurally; and major structural cracks, that do reduce the structural qualities of the wood.
There can be all of these, or just one of these, on a given saw handle. I will approach it as if all three are present in one handle, so the repairs should follow the same order. The glue I use is usually simple Titebond wood glue, but type 3 should be used if you are going to follow the soak option -- more on that later.
Major Crack Repair
First, the major structural cracks need to be repaired. Sometimes, just applying some glue and clamping the crack is enough - yuo can sometimes work glue into the crack and clamp it up. If it's really bad, there are 2 solutions - first, finish the break. If it's close enough to falling apart that it wouldn't take much to do it, I usually just do it - that give me better access to the entire crack, allowing me to glue it up better than trying to force glue into it somewhere that's impossible to reach. Then I try to mate the surfaces as best as I can, glue the 2 pieces back together, and clamp it tight. Sometimes clamping isn't so easy, so I fabricate a wedge system on a scrap piece of plywood.
If the crack won't clamp together, and you can't or don't want to pull the 2 pieces apart, you need to find a piece of similar wood - another old junk saw handle usually comes in handy for this. Depending on the crack, you can either split or cut a sliver of wood off of the donor saw to fit the crack, cover it with glue and jam it into the crack, or you can cut a saw kerf into the crack to make it a uniform width and slice a piece of the donor saw handle to fit it. Leave the sliver protruding from the wood until the glue dries, then chisel or plane it off and sand smooth.
Simple Crack Repair
Some cracks just aren't that major - but look awful or don't want to close up, yet are too small to fill with a sliver of wood. For those, the answer is to first work as much glue into the crack as you can - sometime a thin piece of cardboard or paper can help out:
After you've got as much glue into the crack as you can, take the bottle of glue and lay a tiny bead of glue out directly on top of the offending crack. Immediately grab the pad sander pre-loaded with 220 grit paper, and sand the wet glue into the crack (you'll have to finish by hand on parts the sander won't reach). You should have most of the finish sanded/removed from around the crack so that the sawdust made while sanding is mostly wood, that way it will match better when finish is applied.
The glue will form a sticky film over the handle where the glue is (you'll see it), you need to sand until this is gone, and only the crack has glue and sawdust in it. Make no mistake, the glue will ruin your sandpaper, so it's a good way to use up worn stuff. Let this dry overnight, and repeat if necessary. I've done this hundreds and hundreds of times - it works well, don't let anyone tell you it doesn't - but it won't work if the crack is too large, or if it's too small. If it's too large, the crack must be filled with a sliver or something similar like described above. I've only done this type of repair myself with regular Titebond, not Type III, so I don't know how the results would work with that glue.
These are the little weathered cracks you see on a handle where the wood has dried out, causing the wood to shrink and crack - with those little cracks all over the place. Often there's nothing else wrong with them, but the little cracks make the handle uncomfortable. There's not always a lot you can do aesthetically, but this sometimes helps, and always helps with the feel:
If it's very badly cracked - first, fill the largest ones as described above, then drop the handle into a vat of boiled linseed oil (with a little japan drier mixed into it) and let it soak in it for 2 to 3 days minimum, a week is better if you can. After it's soaked, take it out, wipe it off, and set it in a warm (no sunlight) spot to dry for a week or so. Check it every hour or two for the first several hours you pull it out of the vat, and wipe off excess oil that comes out of it.
If there are only minor cracks, sometimes just several thinned coats of BLO will close up the cracks. Thin the BLO with mineral spirits to about a 50/50 mix, and apply a coat. Wipe off after 1 hour and let dry at least 24 hours, then repeat this at least twice.
After it's thoroughly dried, hit it with a light coat of shellac, then sand it with 150-220 grit sandpaper to sand down the ridges left by the cracks and to remove any raised grain left from the first coat of finish, then give it another coat of shellac. Use an old T-shirt to apply the shellac, and apply it as dryly as you can without it sticking. Doing so will help the shellac to lay down smoothly and leave a more comfortable finish.
The boiled linseed oil (BLO) helps to fill the pores of the wood, expanding the wood, and minimize the appearance of the cracks. It also highlights the grain, so looks better when use, IMO. It also "toughens' the wood up, and helps prevent it from drying out. It can leave the saw a bit "sticky" feeling, though so a light coat of shellac gives the saw a better feel in the hand.