[bigegg]

I would say that it's actually a blacksmithing "fuller" - used in pairs, the top one (as pictured) with a handle, the bottom attached to the anvil.

Used to make an iron bar circular in cross-section, and of a specific diameter - I'm guessing thats what the ?/8 is - 5/8?

If you plan to use it, remove the mushrooming - it's very uncomfortable having a piece removed from your flesh :.(