technically, no. nowhere in the army list does it give a points cap to magic items for characters, although technically it doesnt say they can have any either.
that being said the black hammer is a much better bet.
The rules on taking magic items for characters are in the book in which the list was first released for the list your lord will just be avoided musicians are not worth ten points and two level two’s in a 2000pt game will do nothing.
that is a very cynacle statement there. i use 2 level 2s just fine in 2250-2999. they are effective, but not overbearing and i dont really care too much when they die as my strategy is not focused around them. 2 lvl 2s with scroll/stone is fine methinks. musicians are always worth it, especially when they save your unit from autobreaking from a tied combat w/ undead or ogres. not to mention helping hobbos rally.
the lord on the other hand needs to either have a great taurus for manouverability, or be a bull centaur lord. if you really want extra magic i geuss a sorc lord, but as he is now he is wasted points.
The Lord won’t do much, all the characters are over their magic item limit anyway. He’s usually only worth it on a Taurus. Ordinary Hobgobs would probably do better as war machine protection and are much cheaper.
After saving on all that you could get a Sorc Lord or a BC Lord. I think that wolfriders are worth their weight.