I don't know? I thought it was holding in the firing pin.
That has to hold the firing pin. Remove it and try tapping out the firing pin. Did the frame always look like that near the firing pin? I would suggest using your existing hammer. If necessary have a new firing pin made that is a few thousandths longer on the back end. It is a very simple firing pin so having one made should not be very expensive. Too bad you are not a little closer, I would certainly help you out.