it's been said here several times that tung oil is terrible in terms of protecting the wood from the elements compared to, say, lacquer.
i'm skeptical about using your varnish, as i haven't tried it myself. but hey, if you're willing to see for yourself, why not?
buying a new body would be great, but weren't you remarking about how you love your guitar's sound? that'll probably change. whether it's for the better or not, that'll depend on your ears.
if you want finished strat bodies that are much cheaper, there are stuff like Mighty Mite's. they even have unfinished ones if you want to use tung oil. someone else will have to comment on the quality, though.