Found this on a spoiler site. The lute is part of a quest,
and thus unlikely to ever enhance our songs:

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Lord Grimlot's Love: This is the quest for the
Electrum-Bladed Wakizashi. Lord Grimlot tells you about his
poor, misguided beloved Arlena, who has run away from him to
Mistmoore castle. Being the sentimental type, he wants you to
track down the lass, kill her and return her lute of the gypsy
to him. When you return it to Grimrot, you will receive two
items: a blackened blade hilt (LORE) and a note, and more
info on how to complete the quest. Take the note to the NPC
Dekam N'Tazi near SK guild in Neriak, and you will get a LORE
item, blackened iron mold, a container with 2 slots in it plus
a combine button. He will also explains you need some metal to
forge the blade. We tried different types of metal, from
silver to platnium, enchanted and plain, and found only
enchanted electrum bar works. Put the enchanted electrum bar +
hilt into the mold and hit combine to make the wakizashi,
remember the blade is NO DROP so only the user should combine
the items. (Submitted by Bathory and Keral Darkblade)
---------------------- end quote ----------------------------

This sword is actually a *very* nice item. 1h shash, 7 damage,
21 delay (yes, twenty one), 2.0 pounds - better than demon
claws and on par with many 2h slash weapons. And yes, bards
can use it.

--
John H. Kim
kim@...