Tim--
If you plan to keep the knife, maybe use the process that Grady McCotter used to clean and preserve the sheath.
He wrote it up, and I think it is posted someplace on this forum.
I also could email it to you if you PM me your email address.
Larry
With all due respect to Grady, I have seen too many sheaths he worked on that "
needed" nothing, and the sheaths were sometimes ruined. Became soft, stitching loosened, leather weak and became dark in color. In the end, the "treatment" was a detriment, not a savior.
The only time I would even consider something like that is if a sheath suffered from extreme dry rot.