This might be beyond a simple mod, but I was think of a table, like the construction table, where you place an item, and it restores it to its original components.
Thoughts?
No. Reasons:
A. Need to require spoutcraft or client mods so that people could see the texture and GUI.
B. People could just revert their highly damaged full diamond armor into 24 diamonds, then rebuild it. Infinite armor :/