I've been away for a while and just read your post, so I'm a bit late with advice. I am a police officer and I took one of my old cap badges (with the screw bolt) applied it to an inexpensive Stilwater sporran. I just poked a small hole in the flap of the sporran and screwed the badge on. I wear it with my USA Kilts Law Enforcement Tartan. This doesn't answer your question about converting it to a kilt pin, but you can still honour your family member and keep the piece in tact.