beercia-
"Cut to fit, paint to match!"
Cut out the damaged section and butt weld in a formed patch. Make sure you are using SA grade material of the same type as the head and that the weld procedure is ASME qualified. Don't forget the PWHT if necessary to maintain ductility for an autorefrigeration contingency. Depending on where you're at, you may be required to have an Authorized Inspector involved. At the very least, make sure you are using a crew which is pressure vessel certified/qualified/experienced.
Hammering out the damaged section and covering it up with a fillet welded lap patch are not good solutions. Depending on where you are, that may be considered not only poor engineering but illegal.
jt