I've always thought that a Martin guitar would sound best with a hammered dulcimer and would better "compete" for volume. Here's something that I ran across. This Taylor really seems to hold its own. I realize that they are both mic'ed. The Taylor is actually mic'ed and is not running through with a pickup.
http://www.youtube.com/watch?v=hZt72DVkW2M
The music doesn't start until 1:18. I thought the Taylor really held its own and sounded good.