Is the trans in the car or out? This would be easier if it were out, but anway... take a small block of wood that's big enough to cover the flange surface, and give it a good firm crack with a heavy hammer. Not a dinky carpenter hammer but something with weight. Watch the flange (but be careful of your fingers!) when you hit it, and it should move in (and pop back out) a little. Now try your special "tool" to compress the flange and see if it works. If not, turn the flange back and fourth a couple times and try with the hammer again. I'd be afraid of using an air hammer on the output shaft, especially if the stock diff still has rivets instead of bolts in it. All else fails, you will probably have to install the "tool" on the flange, then get a small drill and carefully drill apart the circlip to get the flange off. Just dont nick the output shaft!
Good luck.
Brendan
84 Scirocco 8v
00 Camaro L36 M49