I've seen some nice tomahawks made from hammers and when forging the smith can create a channel to inlay some high carbon blade steel into for the edge then hammer to final shape - it's a VERY interesting thing to watch and I even think there is a youtube video or two on that same subject.
I agree with Tim 100%; I have forged knives out of metals that will not make a good knife with the understanding they were merely a keeps sake.
Another thing you can do with your dads hammer is to have the hammer plated Chrome, Copper and the options on the handle are endless and have it put on a plaque. Price wise you'll come out cheaper having it plated.
Then again, you might not want to do anything to it and keep just like you dad left it; I have some things from my Grandfather and it's nice to see them in their original form.
God is good always; always, God is good!
"If thou wilst a keen edge win
forge it thick and grind it thin"