It's great to have an Air Chisel (that is how I did mine) BUT you'll want to attack the bushing from the bottom. And BEFORE you do that, remove as much of the core of the bushing as possible.
An 1-5/8" hole saw in a 1/2" drill makes short work of it. Then you can take a SINGLE bevel chisel bit and hammer straight in to deform the metal shell. It will peel right out once that is done. I know this doesn't help you at this point, but for the benefit of others in the future, I offer this method.
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Install new Bushing:
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I did this^, core out, bent flanges in, still would come so I kept bushing the walls in.