According to my copy of the 1907 Merck Index (3rd edition), mercury (II)
chloride ("mercury bichloride, corrosive sublimate," not to be confused
with calomel or mercury (I) chloride) was used as a mordant in hat-making
felt from beaver and rabbit furs. Mordants are substances which fix dyes
and make them more permanent. However, mercury also has the effect of
preventing both microbes and insects from attacking the felt. Thus it is
not clear whether or not it would be used in felt for musical instruments.