Low Quality Raster LOGO Reconstruction in Vector Format

Preparation 

I scanned the image at 600 resolution so i can start with the best image possible.

Clean Up in Photoshop

The clean up in Photoshop was easy considering the quality i was starting with. I simply starts erasing grey's and floaters.

Live Trace in Illustrator

I live traced the image Illustrator found all the points on this terrible scanned image and started deleting points. the result was a somewhat clean image. which is good well better for the next part of the process.

Logo Reconstruction using Pen Tool in Illustrator 

This next part of the process had me stumped for a bit because I haven;t used Illustrator for awhile. i used the pen tool for tracing the result was smooth curves and straight lines. Once i got to the more difficult edges i started messing with anchor points. to get the pen to hug the curves more closely. Once I traced all of the image in different layers I started moving them around so i can reassemble from bottom to top filling the image with black and yellowish gold. 

File Formats

I started with a JPEG image

saved in Photoshop as a PSD

transferred to Illustrator and saved as GIF and save for web as JPEG

Advice On Vector Creation

My advice is to step back take a breath every now and then it can get aggravating at times especially with that pen tool. Also always save drafts with work history this helps when coming back to a project another day.