Thanks for the tips everyone.
After pounding away with practically no movement, I decided to get serious with it!
First I cut the pin in the two gaps between the two parts of the hinge. A hacksaw blade fit the gap without damaging the hinge pieces - effectively I cut through the shoulders of the bushings to get to the the pin.
The pin ends that were in the door side of the hinge drifted out easily - so the problem was in the door part of the hinge. Again pounding on this did not make much of an impact. I could drift it back and forth about 1/32 in, but no more. Time to get serious again.
I drilled the pin using a 1/4 in bit - to make sure that if not centered it would not damage the hinge. I drilled about 1/2 in - enough to go past the depth of the bushing. Then I used a 1/4 in drift in the hole, and the pin came out
Don't know why it was so stubborn. The pin had powdered rust around it, but nothing serious. I can only assume that rust had expanded the pin inside the bushing (plus mushrooming of the pin by the drift) made it too tight.
So if I'm faced with the same on my second hinge, I know what to do. It will take less than 30 mins to cut, drill and drift out the pin - easy :-P .