I'll let others cover the prep and repair, but if you really want a tough waterproof finish the best I've done is with slow cure epoxy. An epoxy finish requires a lot more time and sanding to finish than a traditional oil or poly finish, but you can make it look like either by putting a top coat of oil (matte) or wax (gloss) over it.
Here are some good directions from a guy who does a lot of these:
Start with a fully sanded stock, heat it in an oven to the point it is hard to hold with bare hands. I like to do it in front of the oven to keep it hot, my wife would prefer I didn't. Use epoxy with a minimum set time of 24 hrs, I use G-1 or G-2 from Industrial Formulators in Toronto, available from Garrett Wade. The latter is a 48 hr set which I use if there is any oily exotic wood in a grip cap or fore end tip. Ebony is fine with either.
Mix the glue on a flat board, give it about 20-30 minutes to set, remix very well and apply. I built a rack which uses the action holes to support without touching a finished surface. As the epoxy soaks in, keep putting it on. The cooling wood will suck up a lot of finish. Wipe off any excess.
After it sets, block sand with the blue Norzon paper, dry, about 320 usually works to start on any runs or rough spots. Then wet-sand carefully, I use 3m and mineral spirits usually, but don't hesitate to use water. If this goes well there will be no grain raised or bare wood peeking through. It almost never goes well for me, so I repeat the epoxy, but more delicately and I wipe off any which does not soak into the wood.
The heating, I believe dries any water which I put in by wetsanding. Then I put a 66 or Tru-oil finish over the epoxy in a normal fashion, no special precautions or sealers.
The places to be careful are getting "build" from the epoxy, thereby ruining your nice flat faces and straight lines. Yes, it is a lot of work to get the epoxy just right, but the result is a piece of wood which will sit in 100% humidity at 100F for a week and only pick up the water it takes to saturate the oil finish, without affecting the shape of the wood beneath. No varnish or sealant that I have tested has even come close to the humidity resistance of this finish. It looks and repairs just like the oil finish it is.