The thrust bearing has to come out before the pinion gear will. It’s that flat thing in there with the circle on it. Like FR says, give the gearcase a sharp rap to try and jar it loose. I have used long needle nose pliers to remove it but it’s made of breaklite or something and is rather fragile.
Well I rapped the snot out of it and it would not budge. Since the housing is junk, the PO cut the tail off trying to make it a racer, I slipped a punch in through the gear oil hole and got that black plastic thingy loose. Another rap on the bench and it fell out. I just wanted to save the gears for another go-around some day.
What I do is tap the center hole with 1/4″ X 20 and then make a Ell shaped tool out of 1/4″ all thread. this has to be at last 6 1/2″ to the handle (Ell) to clear. Thread in into the tapped hole all the way & when it bottoms out in the front, it will push the thrust bearing out,