The only walkthrough I found mentions that it's in the bed at (2,1) after you become Lords of Sand Town. The same location where taxes are collected. However, when I got there all I get is "No Taxes have been collected". Going there before becoming lords gives me "Nothing found".
Is there any way to get the hammer? It seems like a bug, the taxes where supposed to be in the chest, next to bed.
Is it possible to do anything with hex editing?
after a bit of experimenting with a hex editor, I found that the quest items in the save file start somewhere at 0x35ed. If you set the next 40 bytes or so to 01 you should get most of the quest items and the hammer amongst the item. I've no time to find the exact byte of the hammer and I won't be cheating it in anyway, just wanted to see what the reward is. It's 500 gold.
If there is a legit way to get the hammer I'd still be interested.