You are correct. The death certificate filed in 1959 does list "One-arm Bill" as William Hampton Lilly. Do you know the relationship of the "William Lilly" listed as the informant?
Dozens of other descendant sources list his middle name as "Henderson". I have never seen the "Hampton" reference until now. Just goes to show how valuable these death certificates can be -- even a generation removed. I will make a note of this reference. Thanks.
http://www.topix.net/album/detail/hinton-wv/UK9NUHLC12F7FASD