I have been reading with interest the email on this subject but did not have anything to add (even though my husband has a forge in our backyard where he makes knives; no floor pits though), until the comment about recycling steel.  I have noticed in my perusal of probate records in Kentucky that frequently lots of "old pewter" or "old iron" were inventoried for sale.  I have submitted a paper abstract to Mary Ellin D'Agostino for her session on probate records at SHA98 that will deal with the material culture items, and their disposition (bequest, auction) as well as who buys what.  I will be on the lookout for who is purchasing "old iron" to see if I can see any evidence that blacksmiths were taking advantage of this market.
Nancy O'Malley, University of Kentucky