I know some people are more sensitive than others, so far I haven't had any bad response. I'm wearing a painters mask, long sleeves, jeans, mechanic gloves and leather shoes (I usually where shorts a t shirt and sneakers and gloves for certain operations when dealing with the soundboard because my hands sweat a lot). when I leave the shop I drop all my clothes right into the washing machine and start the cycle. I'm wondering if I should get the tyvek suit just to be safe. I've been handling it now making rosettes for the past week or so and the back and side plates have been dimensioned. Would Tyvek be overkill at this point? I'm mainly worried about the hand sanding from here on out. All appointments on both these guitars is coco- head plates, rosettes, fretboards and bridges.

Which brings me to the next question. Is it the oil in coco that acts as the vector for the irritant or is it the dust itself? Any precautions need to be taken with the fretboard? Maybe a wax or something to seal it? I'd hate for someone to be pissed off at me because the guitar I built them caused a huge rash on the guy's hand. I don't know why but all of the sudden today I got a little paranoid.

Just wear a dust mask and proceed. If you're that worried about it don't use cocobolo. I find the smell and the dust annoying and somewhat irritating to my respiratory system so I don't use it.

Maybe I'll rub it down with some Everclear a couple times to strip some of the oil out just to be safe.

Coming from someone who has used it and developed the alergy, I would be more concerned about your lungs than anything else. No matter how careful you are, you will find that with dust, the alergy is trouble. Depending on your continued exposure, you may develop the rash, breathing problems, illness that just leaves you unusually tired, sore throat, cold, etc may develop sooner or later.
While coco may be real pretty, it comes with a rather high price tag...your deteriorating health. No matter how good your mask is, how well you have taped yourself up, you will come in contact with it. If you work in the basement with forced air, it will get into your house system. It will be all over your shop. Sure, you will vacuum, but you better have a dang good shop vac.
You might need to get over the bling and go with wood that has a better affect than the risk of ruining your health. Lots of coco figure is flasawn anyway.
Take what you need and throw the rest away. That you like the smell means it is in your lungs. This stuff in not reverseable...

Another related question for anyone who may know: Is the oil neutralized by oxidation, or does it remain dangerous forever?

There are so many other woods to use for fretboards, why put a client's health at risk from exposure to the oil over time?
I've used coco on a few instruments, but never would leave the wood unfinished. Even the inside would get a sealer coat of shellac.

-I keep all my large processing machinery (band saws, table saw, jointer, thickness sander and edge sanders) in a separate room from my assembly room. Dust collector sits in another, adjacent small room. Catch as much dust as possible at the source, don’t let it back into the air.

Many years ago, my physiology professor told us that it is the small particles of a substance being absorbed by the mucus membranes that create a sense of smell. So if you smell -- it, it is in your nose.
Some things act as sensitizers, and if you develop an allergy to one thing it may cause you to develop an allergy to other similar things. I knew one instrument builder who had to give up his basement workshop because his wife was allergic to some of the woods he was using.