Sorry late to the conversation here I have a huge hammer and frogspawn colony/garden in my tank I have two types of hammer the common green and the other is a purple hammer variation.
This is just my take on it
It is not uncommon for my hammer to have heads melt away yet the surrounding heads all are healthy there is no rhyme or reason to it where I'll have a swath of hammers melt away but the rest are healthy. Hammer skeletons are relatively fragile and are easy to break yet the coral is a relatively hardy species and grows relatively fast
As to your situation as others have stated don't make huge changes just to save one coral as it may adversely affect other coral. In my experience if the hammer heads starts to melt away there is little you can do to save that head just focus on saving the surviving heads
Hammers at least in my tank like strong light, low end of moderate flow and likes being high up on the rocks
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 My aquarium is nothing but a smorgasbord for my cats.....
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