What can I do to rehabilitate an area of my lawn where the soil is hard, compacted, and devoid of any grass or weeds? I have a small tiller but it won't be able to break through too far into this soil. Should I just add a layer of top soil, till it the best I can, then plant grass seed?

 

I don't think you will have any success growing grass by just adding a bit of topsoil. If the area is small enough you can turn the compacted soil with a spading fork. If it is an area too large to turn by hand and your small tiller won't do the job you can probably rent a rear tine tiller pretty cheap.

You also need to determine what type of soil you have. If it is hard packed clay you should till in sand and topsoil. Once that is down add an inch or so of loam/topsoil on top to give the grass seed a good start.

 

Till it up.

Go slow, multiple passes may be needed.

Soil prone to compaction needs to be core aerated on a regular basis.