Question regarding Shellac: I applied and let it sit for the time recommended on the instructions. However, When I sanded after letting it dry it left a white film over the wood, especially in the grains (red oak). What should I be doing differently?
Work somewhere dry, wipe it down using a soft cloth dampened with denatured alcohol, strip and reapply finish if necessary.
Stewmac and various other sources have good info on French Polishing.
That just sounds like dust and sanding marks to me. You would get that with any finish you sanded. If you want it to be smooth, you would need to use a grain filler to fill the pores. So basically, you've done nothing wrong, and your project is not ruined. You're just not finished with it yet.
For CBGs, which are supposed to be kind of rustic, I just brush on two or three coats of shellac and call it a day. Maybe just some light scuff sanding with some fine sandpaper if the grain got raised, or there is a run. Then a final coat over that.
For "real" guitars or where you want a super slick and smooth finish, you can either handle shellac like lacquer or do a French Polish finish.
A good resource for lacquer type finishes: http://www.stewmac.com/shop/Books,_plans/Building_and_repair:_Finis...
A good resource for French Polishing: https://smartflix.com/store/video/2371/French-Polishing-For-Guitarm...
Smartflix has some other finishing videos too. You can rent them for $10.
Cut the shellac to 1 lb. 4 quick coats and it's done. Flows out easily, no brush marks. No need to sand coats level, which wears down embossed graphics.
I'm with Skeesix on this one - sounds like sanding marks and dust. Blow it off with an air hose and apply another coat of shellac. Like Skeesix said ; it's not ruined - it's just not done.
I love using shellac. It's a great finish that highly underrated, in my opinion. We seem to forget it's even out there. I thin some regular 3lb cut 50-50 with denatured alcohol to make what's known as a spit coat and brush it on end grain to keep it from absorbing too much stain during the staining process. I also brush on a spit coat before staining pine to keep it from having that mottled, blotchy appearance. Great stuff!
White film on shellac sounds like too much moisture, either the wood is not seasoned, or your workshop is a Florida basement. I would think a good drying out may be all you need. With shellac finishes, I always complete the process by buffing the surface with a section from a brown paper bag. If your'e gentle enough, it won't remove the finish, but will smooth out the rough spots. To prove it, run the back of your hand (it's more sensitive for woodworkers), along a section before and after, this will demonstrate what I mean with the brown paper buffing.