I can't really speak to the historical timeline on overspun strings - but I'm sure that someone on a lute or early music list or forum can tell you the full story.
We experimented with gimped strings a few years ago when we were in search of The Ideal Low G Trompette. We calculated the right string size and got one from Dan Larson. I really liked it. It lasted about 6 months. The next two that we got only lasted a week or two each. I don't know whether it was just a bad batch, or something else had changed, or what, but the strings just didn't last: the internal wire broke, and it was all over. We haven't really played with them any further, time and money being the limiting factors - the price is reasonable if they last for 6 months, but not so much if they only last a week. It could be that I was twisting it too much, but I wasn't doing anything different than I usually do, and the previous string had lasted a lot longer under the same conditions (or abuse). We've certainly found that the flatwound viola strings that we use for chanters are much more fussy about being twisted back and forth for cottoning than a plain gut string. I can make a 180-degree twist in a gut string and it barely blinks, while the same twist on a viola string will break the metal wrap in short order. YMMV, as usual. Alden
