Summary:
When ever the master gong is in the craft cue, the Blacksmith just go idle or rests by the fire or restocks items, all but never crafts the gong Steps to reproduce:
uploaded save game
The blacksmith can’t reach the master hat. There are 2 in your savefile, one in the lower ground that’s at the same level as the water (you’d need to make a ladder to reach it) and another one that needs to be marked as loot, and is far away outside on the upper level.