I tried for about four hours on this and gave up. Is there any hope for restoring this photo? Or should I give up all together?
that looks pretty tough, you should ask Pitch Black, he knows so much about these things
That's a tough one...but I'd say there's enough there for it to be done. You might need to copy a little baby hand from another pic as you've lost one in the crease here. Retouch Pro has a few tuts... http://retouchpro.com/tutorials/index.php & as Viika so wisely said...ask Pitch, he's your man!
In short i'd say yes but its a toughie.
i'd play around with the adjustment levels try and bring baby back to life. then once the tone is improved, attempt the restoration