:( doesn't look good. Maybe some infection or something. Doesn't look quite like BJD but could be. I see a lot of muck where the hammer is gone. Sad to say I think it's gone and will continue to deteriorate and potentially spread whatever is killing it to the other hammers. I would remove it carefully with the pumps off. Wall hammers are notoriously difficult and could be that it alone..
Dipping can help but I have had mixed results with Iodine particularly with Euphyllia and potential BJD. I keep Cipro on hand from now on. I do dip in Bayer and or Coral RX for new corals but for other pests, not bacteria.