If someone was going to handload ammunition for the PO-8, it's safe to say that they'd be using modern smokeless powder, that being the same powder that'd be in the specific types of ammunition I mentioned (ie Winchester, S&B, Blazer, etc). They'd be reloading to the same specs or very close to the ammuntion the Luger was designed to fire otherwise the ammunition wouldn't cycle the action properly.
A slow/medium to medium burning handgun powder with a 124 gr FMJ projectile is what was used 60 years ago and what is used today in the ammunition I mentioned (aside from the 115 gr ammunition I mentioned). How would you handload differently?
The pressure curves and burn rate for the loads I mentioned that are available commercially are well within the safe zone for a Luger. If you use a weak handload, you'll never get the handgun to cycle properly. If you use a hot load, you'll put undue stress on the action.
With the right ammunition (specifically those I mentioned) and a well-maintained Luger, I would not hesitate a moment to pull the trigger.
As an FYI, the Brit military ammo you mentioned, the 2Z, might be the Mk IIz, which was developed for submachine guns and approximates the specs for the +P rounds, if not more...definitely a no-no. As I mentioned, +P or +P+ 9mm will lead to problems in an older handgun.
I don't doubt your first hand experiences. I do trust my Speer and Hornady manuals, the numerous books (Walter's "The Luger Book" is an essential for any collector) and articles I have read on the subjects, the overwhelming opinion of Luger experts and the reload vs commercial/surplus ammo experience and first hand shooting experience I have.
I agree that reloading is the best, but for a total novice that's a great deal of information to digest and a very expensive proposition for starting up a reloading operation, especially for the occasional shooter.
So what would your preferred load be for the Luger?