Hey Dave,
flaxseed and linseed oil are the same thing, just different names so freshness is the he key esp if you're giving it to your dogs. Fresh its a great antioxidant, mopping up free radicals so it'll be great for the hounds but after a few weeks it will be stale unless it's unopened and sealed under nitrogen and so will be of little value. I even read somewhere that once oxidised it could be carcinogenic but I didn't see the scientific evidence and certainly wouldn't be worried about the exposure I'd get from a treated spoon. If you want a longer lasting product for the dogs, you could get whole linseed/flaxseed and just grind and add it to their food as needed. The seeds don't keep long term but they do have a much longer shelf life than the oil.
Yes - I've not heard about boiling spoons in milk either. Makes sense I suppose as casein has been used as a glue so I guess it seals the pores of the wood. Do you end up with a varnish like finish Mr Fenna? I'd be interested to see an example if you've got any photos. How long do you boil in the milk for? Thanks for the idea.