[Taqwus]

Tried a Nataraja w/ Hammer of the Forge Lord + Hammer of the Cyclops Last night, empowered the fellow in some fire and astral. No other forge bonuses active.
20-gem items seemed to cost 4, 5-gem items cost 1, didn't try other levels. It's not free, but it does stack in some odd way (80% off at those two levels, at least; better than multiplicative bonus of 75% off let alone single bonus of 50%).