This "getting stuck while the instrument is shining in Link's hands" glitch has happened to me at least four times throughout the game. The only way I would get past it is by closing the program (and not just resetting it), re-entering the dungeon, (luckily the boss stays defeated) and then trying to grab the instrument again. Sometimes it stays stuck again, but eventually on further tries, it doesn't get stuck, and the game progresses on.
HOWEVER, I just finished Eagle's Tower (Level 6) , and it did it again. Unfortunately in order to enter the chamber with the instrument, you have to have a stone door open itself, which only happens right after the eagle boss is defeated. So when the game got stuck with Link holding the instrument over his head YET AGAIN, I closed the program and reopened. Boss is still dead. However, when I walk up to the door outside the instrument chamber, it doesn't open. As a result of this glitch, my game save is permanently locked at eagles tower, which is pretty late game (and the most frustrating dungeon of all!) so I'm pretty irritated about it. I don't know programming or else I'd look in the code and open the door.
If anyone figures this out, let me know. I'll post again if I figure it out.
T_Rainman - just try resetting and trying again. When you get to Eagle's Tower, make sure you make a backup save before fighting the eagle boss, so if the glitch happens again, you won't get permanently locked with no way to get the instrument! :)