When installing an okie bushing, yes, the original bushing needs to be removed. There is a special puller for this job made by Vintage Auto Parts, and available from them or some other vendors. It is like $35, which is kind of high considering you will only use it once. What I did was purchase it, use it, and then sold it on the stovebolt swap meet page for $25. That way I only rented it for $10. There is a seal also down in there, but it is left behind, the okie bushing pushes it further down and it does not cause any problem. As for the dowel, it will pop out as you extract the original bushing, it does not need to be removed prior to using the puller.
