I've seen somebody post that you should soak it in Pepsi.

Never tried it.
Sadly, I
have tried the hammer. If you do resort to a hammer, here's what'll happen: The hammer will smash the end of the joystick shaft, making it mushroom out a little bit, and squashing the e-clip groove. Then, even if you dislodge the grommet, the mushroom effect will keep the shaft from sliding out, and you won't be able to get the e-clip back in the groove. If I were to do that again, I'd leave the e-clip in while I was using the hammer, so the groove doesn't get deformed. Then I'd just expect to have to grind the mushrooming off of the bottom of the shaft.
You could also just cut the control panel, remove the stick whole, and then only install this stick in panels where you can fit the joystick ball through the hole.