Sounds like it was staked - look around the plunger bore on the face of the sight base for indentations. I guess even though you managed to get it to come out a little, it's still not free. If you have it out 1/16", you don't need much more. You can also punch out the front sight base pin to remove the plunger and spring so you can maybe do some careful filing around the face of the bore if you find that its staked. Otherwise it sounds like possible firing residues and/or moisture have bound it up. Keep using a good penetrant on it and keep moving it. You might get some brown oil out of it if its rusty, and it might need a new spring.
BTW, upon re-reading, sounds like you are trying to actually take it out without removing the sight pin? You can't do that. If you have it out 1/16" with spring action, I think you should be able to index a muzzle attachment with it and it will hold it in place. A little bit more would be great, but it might already be all the way out - they vary.