Step 1: Reframing the problem with a unit volume:
Imagine we tap-fill exactly $1\ cm^3$ of powder. Since the tap density is $3.26\ g/cm^3$, this $1\ cm^3$ of loosely packed powder contains a mass of $3.26$ g of iron.
The apparent density value of $2.66\ g/cm^3$ describes the powder before tapping and does not enter this calculation, we only need the tap state and the fully solid state.
Step 2: Finding the true solid volume of that same mass:
If that $3.26$ g of iron were melted and cast with zero porosity, its density would be the solid density $7.85\ g/cm^3$.
\[ V_{solid} = \frac{mass}{\rho_{solid}} = \frac{3.26}{7.85} = 0.4153\ cm^3 \]
So the same mass of iron that fills $1\ cm^3$ as tapped powder would occupy only $0.4153\ cm^3$ if it were fully dense with no pores at all.
Step 3: Converting the volume ratio into percent densification:
The degree of densification is the fraction of the tapped volume that is actually solid metal, expressed as a percentage.
\[ \text{Densification} = \frac{V_{solid}}{V_{tapped}} \times 100 = \frac{0.4153}{1} \times 100 = 41.53\% \]
This is the same number as the direct density ratio, because $V_{solid}/V_{tapped}$ and $\rho_{tap}/\rho_{solid}$ are algebraically the same expression, just built up from a physical picture instead of a formula.
Final Answer:
Whether we compare densities directly or trace the volume of a fixed mass of powder, the iron powder is about 41.5 percent as dense as solid iron.
\[ \boxed{41.52\%} \]