I'm not sure where the adding a cylinder is for, but to smooth an object, if it's a polygon, select it, then choose Polygons>Smooth. If that smooths it too much, you probably only need to smooth a certtain section of the hammer. To do this, right-click on the object and HOLD it down. This will bring up a menu. Select Faces. Now you can select the faces on the object. Select the faces you think should be smoothed. Now, go to Polygons>Smooth.