Hey all,
I agree with Trogdor that you shouldn't use the Walnut shells. As for you argument with the sand. I am not sure that you are taking it in the right direction. Sand does pose an impaction risk. While it isn't as big of a problem as the walnut shells, it is still an issue.
As for the argument that this what they live on in the wild. Think about it this way. How much more sand surface area is there in the wild than in your enclosure. It is a cleanliness factor. A dragon in the wild will poop and go away from it. In many cases far away from it. Your dragon poops and can't get away from it. I bet your already thinking that you sift the sand all the time. Well, bacteria and parasites will fall through with the good sand right back into your enclosure and all you have really done is moved it around.
With that said. I don't see a problem with using sand providing you change it often, and I mean very often. Thats why I don't use sand for my adults. I have to many cages that I would be changing and that would cost me way to much money, regardless of which sand I use. Once my babies are eating I place them on sand. There are several reasons I do this, and next year I am going to experiment in using other non-particle based substrates like repti carpet. The sand for the babies are changed evey weekend. I go through 50 pounds of sand every couple of weeks.
I hope that I didn't offend anyone because I didn't mean to. Just my .02
Ernie