How to pronounce Lutzen?

Two accepted pronunciations (English approximations):

1) Originally, the "u" had an umlaut, making it closer to the "oo" sound. So: LOOT-zin

2) Umlaut dropped and dialect shift to a short-u sound as in "dug"; LUT-zin

Depends on the personal preference, but in either case emphasis is on the first syllable.