Check to make sure in the script that its actually pointing to your hat and not some file it can't find so it replaces it with the gun model.
Did you flatshade it or unweld every vertex? Flating shading is when you assign faces to a smooth group, the unwelding way makes the game think that no surfaces are connected so it doesn't shade over each surface as if they were connected. Basically unwelding is bad..Also set the LOD to 16 and not 100, BL is really really screwy with Torques LOD system and works best if you use a low power of 2 number.
