Small Hacksaw (Junior Hacksaw @ Homedepot)
Large flat-tip screwdriver or Chisel
Overall this took me about 10 minutes once I finally got started. First remove the blade from the hacksaw and push it through the open section at the bottom of one of the hanger bushings. If you can not get it through on its own, a sharp knife should help. Next reassemble the hacksaw with the blade through the bushing. Now use the hacksaw to make some room by cutting the bottom nub of the bushing out. Next stabilize the diff hanger in a vice or by other means and begin to cut through the rubber and the steel outer sleeve making a notch that is almost all the way through (See Picture). Grab your hammer and chisel and bend in the outer sleeve as show in the picture. This will probably take three of four hits before the thin steel of the outer sleeve tears and the bushing falls out.