Generally speaking Dads get the shaft in terms of gifts. Whatever moron thought the whole Tie on Father's day was a good idea should be hung with said tie.

That said, my dad is indeed difficult or he was growing up. As I matured my understanding of his tastes matured.
We don't buy him tools because he doesn't work with his hands really. They have a groundskeeper who takes care of things. He plants the occasional garden but not enough to warrant anything specific and when he does, he uses the groundskeeper's tools.
We don't buy him clothes because he shops often and still has things with tags on.
We don't buy him cologne because just like above, he takes care it himself.
That leaves things that he is very interested in. As a highly educated introvert he enjoys travel, books, and music. For the first time I nailed it last year. Tired of buying impersonal gift-cards I took about 3 dozen of my photos from my trip to England and made him a book through iPhoto. I wrote a small introduction about what I thought of him and how he inspired me and then throughout I wrote something about each photo such as where/what it was. The fact is I take a fair amount of photos when I do get to travel but never
get take the time to do anything with them. He bothered me for years. The book actually brought tears to his eyes and the hundreds of dollars spent on the rest of my family soon was overshadowed when the book was given. In other words, little did I know but the $60 book trumped everything. It will undoubtedly be hard to top that one but I think I may come close.
This year he wants all of his LPs on the computer to put onto CD. Last year he got the turntable and no one showed him how to use it. This year I'm going to spend time doing that with him. As he tells me about it his face lights up and I can see this is important to him. I'd rather spend cash on him, but alas he doesn't want it. In turn he'll get a fat bookstore gift-card which makes him very happy nonetheless and my time, which he knows is quite precious these days.
Think about what your Dad does, what he has the most interest in and go from there.