Does black walnut need any insect treatment to prevent infestation when air drying or does the wood contain its own natural defense? The odor of the wood is quite pungent.
I recently slabbed a black walnut tree that had been in ground contact for about a year or so. There were termites under the bark and in parts of the heartwood that had remained wet. So, while this doesn't directly answer your question, it would seem that a bit of care should be taken when drying any wood--don't allow ground contact of the drying wood or any wood it is resting on, and keep an eye on the wood as time goes by. It should be okay, but wood as nice as black walnut is worth taking care of. I would err on the side of caution--some bug spray on the surface might be useful.
Lindane dries on top of the lumber. So any PPB that is already in your walnut will be unharmed by the lindane until he/she comes out. Once again, that is why I only purchase fresh sawn lumber. If you choose to go this route, use common sense while using lindane--long sleeve shirts, rubber gloves, etc. Hit the shower after you are done. When the lumber is dried, use a DC while planing. Since lindane is superficial, once 1/32" of the surface has been removed the lindane should be gone. Or you can sell your sapwood lumber as antiqued bugged lumber on ebay.