Can this cantle be saved?

[48HofC]

Leather military sporran cantles of that type from the late 19th/early 20th century if they haven't been properly maintained, turn out with what you have. Moisture has most likely damaged that one and I don't think anything can really bring it back to the original look without disassembling it. I have two, one from the Boer war era that has always been taken care of, and one from the 20's that got wet and not dried properly and is in just a tad better shape than yours. Getting the badge off and on is extremely difficult as you surmise, not fun at all. I highly doubt that is liquid lustre on it, that's more of an American shortcut than British.