How might I detect varnish?
No utensil intended for real use (other than perhaps as a salad scoop or bowl) should be varnished.
It may be difficult to distinguish a varnish from an polished and oiled surface, but look for a clear shiny type of appearance where the grain of the wood is completely masked.
Are there other steps to seasoning this type of spoon?
Just rub it with mineral oil, as described below, if it is dull and untreated. If it is already seasoned, there is no need.
You may want to repeat the process two or three times, for a brand new utensil.
[I]s there anything to watch out for when washing/drying?
The main thing, as you have already mentioned, is to not use the dishwasher. Don't soak it in water. When you wash it, give it a quick towel dry and then let it air dry.
You don't want water soaking into the grain, which will help raise the grain and may eventually lead to splitting or cracking (at which time the utensil should be discarded).
Is there an upper temperature limit or hot surface type that should be avoided in cooking?
I don't know a specific one; use your good judgement. Wooden tools are often used in scraping up the fond from a pan after deglazing, which is probably the hottest treatment they would normally be exposed to.
As you happen to have a ladle, you are unlikely to be using it on the bottom of scorching hot pans in any case.
Wood is actually quite fire resistant, and while one may show a few scorch marks at the tip from a very, very hot pan, in general, routine use is not going to harm it.
Should it be maintained by say rubbing it down with some type of oil once in a while?
Yes, occasionally you will want to rub it with a little food grade mineral oil (which resists rancidity). This will help prevent liquid from soaking into the spoon.
When you see signs that the last treatment is wearing off, wipe it down with just a bit (maybe a half teaspoon or even less for the whole ladle), let it sit an hour or tow, then rub off the excess.
This will help you get a longer life from the ladle without splitting or cracking.
See also:
It is okay to use wood, you need to ensure that there is not pine or especially MDF dust in the sawdust that you are using. Approach with caution, unless you can absolutely guarantee the source of wood shaving/sawdust is what they say it is then leave it well alone. There are a lot of joiners using MDF and pine and to have a batch of oak or cherry contaminated with either of these products will render any food you smoke as inedible at best and actually quite dangerous.
If you'd rather enjoy a more DIY approach you can harvest wood after fresh autumn or spring winds. The best time for collecting wood is in the winter or very early spring before the sap rises. The sap will add moisture and a slightly bitter taste to your wood shavings due mainly to the higher resin and sap content of the wood. This can be avoided by choosing when to collect. I wouldn’t hold onto this rule, but if I had a choice, I would go for the winter harvested wood.
Best Answer
Olive oil tends to go rancid; as do most other "food oils" - [walnut oil is a "drying" oil" (and as such won't go rancid) but if you are "in the industry" it's one more possible source of an allergen (tree nuts) that you don't want in a professional kitchen (where you'd think - no tree nuts in this dish) - does work fine at home if that's not a concern.]
Scrubbing the handles down with a baking soda paste should tend to saponify (turn to soap) most of the olive oil. Or send them though the dish machine a few times, and otherwise scrub, soap, degrease; then rinse well, dry and re-oil.