We have always used a mixture of sawdust and glue (usually epoxy) to fill defects in wood furniture. Useing epoxy would be way to much money for this type of floor. and i would think you would want something that is more elastic. when you said oil base sealer did you use polyuraethane type of finish. I thought that if you used this and then put serval coats overtop that it might work although I too wasn't sure if it would seal it or just soak in. I'm planning on doing this type of floor on a new house I am building for myself I probably won't get to it till this summer but i'll try some experimenting and let you know what i come up with also if you find something that works good please let us know..
Another idea i had was to use regular tile grout with a latex aditive but i'm not sure how much the wood will swell up when useing a water based producted.