Welcome aboard, Leoservers.
How about using a projector and squares of acrylic sprayed with rear projection Screen Goo?
This would allow you to use a flash game like the one linked above or write your own.
A support grid (red) holds the acrylic pieces (gray) loosely resting on the arms of microswitches (blue).
When you hit the acrylic with the *padded* Mario hammer, the acrylic moves down pressing the microswitch down until the acrylic hits the support grid.
As the hammer retracts, the acrylic is lifted back up by the microswitch and some weatherstripping foam (not shown) on either side of the switch arm.
Be sure to use the heaviest microswitches you can -- the ones that come in Paradise's Economy Flight Stick easily lift an 8" piece of 1" x 4", but the ones that come in a Happ Super don't.
Scott
EDIT: Might be easier to countersink a pushbutton with a ~125-150 gram microswitch instead of using the levered switches shown. A standard Happ pushbutton can lift the same 8" piece of 1" x 4" described above.