There are three Blacksmiths in Mournhold. All of them buy and sell weapons, armor and shields and can repair damaged items for a fee.
For a list of all merchants in Mournhold, see here; for a list of all Blacksmiths in Morrowind, see here.
 List of Blacksmiths
||Mournhold, Craftmen's Hall
||Also makes custom Ebony, Glass, or Adamantium Armor
||Mournhold Great Bazaar
 Custom Armor
Bols Indalen in the Craftsman's Hall in the Godsreach district will offer to make you some custom armor providing that you supply the correct ore and the fee. He'll supply you with a complete list of what items he can make and for how much. Once you give him the ore and the gold, come back in 24 hours to receive your armor.