I actually like this hammer. It's a good, solid sub, but I would have liked to see more story hooks and background. Maybe a description of the current wielder.
I quite like the twist, the ability to break down social barriers would be surprisingly useful. I guess that because of its size, magic and the enhanced social abilities of the wielder, anyone who owns this would have a far ranging reputation.
I could definitely see the hammer's reputation, if not its actual power, being a great source of plot hooks and GM mischief.
3.0 base +0.5 for twist.
Breaking down social barriers with a MASSIVE hammer is a pretty funny idea. I'm not sure exactly how it would work, though. Does the bearer just walk up to someone with the hammer strapped onto his back and engage in conversation, or does he have to hold it threateningly? I can imaging that the effect is not entirely magical in nature, as the sheer size of this weapon would be enough to intimidate most sane people. . .
In the hands of a skilled necromancer, I wonder if the flute could manifest new powers? Also, while I understand that it was taken from a banshee, does that mean that all banshees carry an item like this that gives them their power? Or was it created by some other being? Overall, a compelling item.