So a cleric walks into a club...

Question for all you old-school DMs out there: How would you handle this scenario?

My 1st level cleric's mace breaks, so he drops it, draws a dagger, and attacks a charging orc.

What happens? Does the cleric auto-miss? Does his dagger break? Does he instantly forget all his spells for the day?

See, clerics are prohibited from using anything but blunted weapons—which I find to be a very "gamey" decision foisted onto the cleric class for no other reason than to balance clerics against fighters. The idea that holy warriors can't bring themselves to spill the blood of their enemies—yeah, that's crap. If you've got a job to do, you'll hardly turn up your nose at the most common weapon in the entire game (sword) to get it done. Or something.

But still, within the paradigm of "imagine the hell out of it" old-school gaming, how would you referees deal with a cleric player who insists that his character tries to attack with a sword? Or uses a dagger to cut the bonds on a captured prisoner? Or picks up a cursed sword and puts it in his backpack?

I'm genuinely curious, because Mike/Chgowiz and I came up with a neat little workaround to deal with this scenario in his Dark Ages campaign. It removes the gamey aspect of the restriction that I find distasteful, while not overpowering my cleric character. I'll post the details on that later, but I wanted to hear DMs' responses first.