Micheal
What sort of power supply to you have available in your shop (current and voltage)? Assuming you have a 15 A 230 V supply, the most power you can get is 4.6 electrical hp out of your utility. A 20 A 230 V supply will give you 6.1 electrical hp. Due to inefficiencies in the motor, you will get something like 80 % of these figures at the motor shaft. Do you really need 5-7 hp for your hammer. If not, you can get a simple single-phase motor, like Rob has recommended.
Rob is right on about the differences between a rotary converter and a VFD. I would add that a rotary converter would most likely be physically larger, heavier and noisier than a VFD, especially for one in the 5-7 hp range. Your electricity bill will most likely be higher if you use a rotary converter. The input-output efficiency of a VFD should be better than 90% whereas the rotary converter might be somewhere around 60-70%. Our Motor R&D Manager also said that your motor will run hotter and be less efficient if it is connected to a rotary converter.
It should be possible to use any VFD with a single-phase input. With a single-phase input, the VFD's input current will be 1.73 times higher than the three-phase input current. Some VFDs are designed with beefed-up input rectifiers so that they could be used with a single-phase input with no derating of the output power. Those without beefed up input rectifiers can still be used with a single-phase input but the output power that is available is reduced to 57% of its normal rating so you don't blow up the rectifier. For example, you will need a VFD rated for at least 8.5 hp to run a 5 hp motor. I would expect that the cost for the 8.5 hp VFD should be less than 1.73 times the cost of a 5 hp VFD, i.e. the $/hp ratio should fall as the hp increases.
The 3 hp "limit" that Dave mentions is due to the fact that industrial users ocasionally use a single-phase supply when the motor is 3 hp or less but would always use a three-phase supply when the motor is over 3 hp. Thus, none of the manufacturers bother putting an input rectifier rated for single-phase operation on VFDs rated for more than 3 hp.
If you do decide to go with a VFD, either get one with a NEMA 4 enclosure like the ones that Rob sells or mount it so that metal dust will not get into it. The reasoning is the same as for using TEFC motors instead of open motors.
Have a great Turkey Day!
Phil