When I try to cut the hammer (opaque) out of the block (wireframe), instead of cutting the way I would expect, it seems to have no effect until looking at the edges of the object in wireframe or edit mode.
As you can see, it cuts the perimeter of the intersecting portion, but does not register the rest in the process. I have already checked for doubles and recalculated the normals on both objects,
I'm relatively new to blender and entirely new to stack exchange (I made this account just to ask this question) so if there is anything else I can do to help you answer my question let me know and I will try my hardest to get you your information. Also, if this question has already been answered please link me to it as I have tried to find someone else with the same issue and failed.
A made a test file where I copied over the two objects from my main project to isolate them. I accidentally found a solution in this project (I will comment it to mark it as an answer) but added it just in case it could be of use to somebody.