Think im going to go the carbine steel route AND A DRILL PRESS lol
That should work, but do try the hammer, even if you don't take the time to heat it first. Drape a heavy cloth over the jaws of some channel locks to hold it and take a hammer to it. The force might make it free up and be knocked out. If six or seven blows don't do it, it probably isn't going to work, so it won't take long to find out.
If it is the air hole, and you have anything small and hardened, like a tiny screwdriver with the black hardened shaft, take a look at going through the adjustment hole to pry the drill bit in the opposite direction. Depending on where the spiral is, that might work. Even if you booger up the top thread of the grub screw hole (not likely), you can just take a burr and take out the first thread.
Good luck and let us know how it goes.