I haven't tried grain filling with tung oil but I bet it would work. Works fine with tru oil. My advice would be to not use such coarse paper because you won't get the sanding marks out. Sand it conventionally and do your grain fill once you get to 320. Slow your lathe down a lot. You need to keep the paper wet with finish and you will get clogged paper in no time. That's ok...You're using that goo that clogs the paper to fill the grain. That's the idea. After you get it covered in goo, sand it with clean 320 until you've removed the goo from the surface. It will take a lot of sandpaper. Then set it aside to dry before coating with finish.
All that being said, I don't know that you'll have much success doing a grain fill on spalted maple. It is like a sponge and sucks up the finish. Plus it is just mighty soft. My best advice is to shoot it with sanding sealer and then finish it with spar. Or send it off and having it stabilized before turning it!
