Hi there ...
I am far from an expert on this subject, but recently went through a similar issue with my own hammer corals.
In the end, I narrowed it down to two possible issues:
A) Toxicity released from leather coral [I had recently added some Sinularia]
B) Brown Jelly Disease (BJD)
Have you by any chance recently added any leather corals to your tank? Alternatively, if you've had leather corals in the tank for a while now, are you changing your carbon frequently enough to remove the toxins they release?
In my case, I started by removing the Sinularia, replaced my carbon, and did a series of 25% water changes over several days to eliminate toxicity. Unfortunately, it didn't help ... my hammers kept going downhill. In fact (and again, I am no expert so don't take this as gospel), a couple of my hammers looked very similar to the last close-up photo you posted (polyp retraction and a brown substance around their base)
I then moved on to treat it as BJD.
Unfortunately, BJD is much harder to eradicate. According to my research, all Euphyllia species (hammers, torches, frogspawn) are particularly susceptible to BJD. The best guidance I found for treating BJD is a two-step dip (freshwater followed by Lugol's solution). BJD is highly communicable - and can rapidly spread between colonies. So I moved anything that looked less than perfect to a QT and began a series of dips. I started dipping them once each ... and they kept getting worse ... so I dipped them again ... and they kept getting worse ... so I went to daily dips. At the end of the process, I had lost 6 of my 7 colonies of Euphyllia.
Luckily, it does not appear to have spread to other corals (knock on wood).
So - either I am really crappy at doctoring my corals, or BJD is no joke.
My advice to you - do some research on BJD and if you think this may be a case, MOVE QUICKLY ... it can spread so the faster you begin treatment the more likely you are to be successful.
Here again I want to remind you that I am not an expert and could be totally out in left field here.
Would love to hear what you end up doing!