Ok, using MS3D 1.70 and the second LWO importer I was able to bring the model in with minimal errors. I happen to use the color and specularity check boxes out of curiosity. It said that I needed to weld some faces, but that's a minor thing. I did loose texture mapping, but once you learn MS3D's texture editor it was easy to select the faces, open the editor, mark the region that I wanted and re-map the faces. I'll e-mail the MS3D file to you so you can see what I did.
--
TAZ
Oh yeah, I also moved the model so that the origin was at the handle. You may want to move that back, if needed.