It's possible that the clutch disk is just rusted to the flywheel and that the adjustment was run all the way out in a attempt to get it to disengage. There should be something in the archives regarding methods to unstick the clutch disk. Can you look to see if the pressure plate is actually moving away from the clutch disk?
I don't believe you have to do anything to the aft drive shaft to remove the transmission, but someone will correct me if I am wrong.
