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The key is in the sewer in the first level of the Baldurs Gate Dark Alliance.
Pass by save point
at the mine camp you must unlock it
I'm afraid it's impossible to get the onyx sword in Dark Alliance II, but it can be obtained through item replacement using a PlayStation 2 gameshark. I don't know the code though.
There is a gate slightly northwest of the Beanbean Castle Town. Open the gate using Luigi's Thunder in the orb next to the gate. Move along the path until you come to a cave (at the break, go down and left). This is the Hammer Bros.' sweet new workshop. they'll give you your new hammers. You'll also come back here later just before you go to Joke's End to get the amazing... ULTRA HAMMERS! (You'll need them!)