That guitar actually comes from my Yamaha PSR S750.
I have seen exactly what you are talking about when singing and playing for these folks. There is a film, "Alive Inside", that documents the effect of music on Alzeimer patients. Behind that film there is a movement to get Ipods with personal playlists into the hands of these people. A very worthwhile mission in my mind!
God Bless,
Don
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God Bless,
Don