I haven't tried it, but luckily none of my kids have gotten lice either. And I am allergic to tea tree oil. I am not going to be using something that I know makes me break out in hives! LOL.
I have heard that coconut oil works great for getting rid of lice too... and it smells a LOT better than tea tree oil! (Saturate hair with coconut oil, put on a shower cap, and leave it on overnight. Wash with regular shampoo in the morning. It will also make your hair super soft.)
My kids use coconut shampoo... maybe that is why we have never had problems with lice. Or it could just be a lucky coincidence. ;-)