I made a knife using iron but it came as a tin one. (i'm in Version 0.0.71,just in case you need to know)
Figured it out. You have to click the sign that's on the door, not the one that's outside. ><
Press Z on the anvil to access the Radial Menu. There you can switch between blade and hammer
Just hit the z button to bring up a menu, then click the blunt (or something like that) section, and then you can hammer your INGOTS (NOT an existing blade) and it will make a hammer head.
Had a few bugs.
1. The one ingot thing everybody's talking about.
2. Sometimes the heated parts doesn't cool down when placed in the water.
3. Even though I had my shop closed someone came in.
[After I woke up]
4. Opened my shop. Went away from the door for a sec, then stayed looking away from the front desk. Realized nobody's coming in. Found out my shop's turned 'closed', so I opened again. Still no one came in. So looked for someone who doesn't have a weapon outside and found this guy.
No idea how he got stuck there.
[All weapons were made before I slept.]
5. Sold my Great Sword, the dude never paid me. #somewhatbroke Because I placed most of my money on it.
6. Was trying to give a customer a great hammer, but they wouldn't take it. Realized that the hammer was only showing "coppergreat hammer head" (even though it already had a handle) instead of "copper great hammer", so tried to stick another handle and game crashed.
[Restarted Game]
I hate reassembling, but this is normal, right?
7. I found that if you leave the hammer toggle on and whack only 1 ingot, you can make a great hammer.