Well, perhaps time for something new...... I have rebuilt a number of both Gen's forks now, and have once experienced the dreaded issue of lower bushing jamming inside the middle bushing just as what happened to gixxerjasen. This happened to me on two forks. Once this happens the middle bushing expands very tightly inside the outer fork tube, preventing the slide action one normally uses to remove the upper bushing and the seal. How resolved? First attempt to drive the inner fork tube back down resulted in the lower bushing unjamming from the middle one (use a block of wood held very square to the upper fork tube while striking rather hard with a large rubber hammer, will take more than once). It worked, and was able to continue normally.
On the second occurrence, above method was not successful. One might think as one drives the inner fork tube back down, the middle bushing should reseat itself in it's "groove", then as one continues, one might think one can unjam the lower bushing from the middle...... this particular one did not, and as the fork tube was hammered back, it took the middle bushing past it's seating area and further down into the outer fork tube... not recommended to risk damage down there as this is the area the lower bushing travels in as the suspension travels. The friction in this scenario prevents slide action by hand, so creative solution required to get these things apart, especially when you do not readily have a hydraulic press than can pull.
First, I assembled two hose clamps such that the two tighteners were on opposite sides of the tube so I would have two opposing spots to push against. Hose clamps were tightened around the upper part of the tube just below the area where the fork tube increases in diameter (upper triple tree clamping area). I then made two wooden V-blocks that would fit over the upper fork tube and clamped them around the tube, up against my hose clamps. The idea was to equalize as much force as possible that would possibly crush/distort the fork tube. This assembly was clamped into a vice, then the axle shaft was inserted, and with another wooden block against the axle shaft, I hammered against it to force the lower fork tube off. Not much else one can do... once apart, fork tubes were cleaned and inspected, and voila, no visible damage.
Here's the deal and theory..... always heat the seal, as it seems to require the largest force to remove if seemingly "glued" in there, even without a jammed bushing issue. Second observation, the upper bushing also requires significant force to remove. Why? Observe next time you install one, these are like piston rings, and there is zero gap left at the split.... actually as they are installed, there is actually significant force required to seat them due to the interference fit. This makes them harder to remove of course. I install these by using an old upper bushing and the large washer next as a larger landing area for my homemade 2" ABS (or PVC) seal driver.
On to the other little fact we have not discussed so far.... one installs the lower bushing and assembles it into the lower fork tube. It COMPRESSES as it is installed. How much gap is left in that "piston ring" I do not know, but I do believe there is some as they tend to go in fairly easily. 'Spoze if we had a way to actually measure, we'd be smarter, but the theory is that we have to have enough clearance down there for the bushing to ride on a film of oil. Now on to the middle bushing..... one installs it by sliding it down the inner fork tube, then pushing it down with a special tube tool into it's seating area. Here, the bushing actually EXPANDS while it seats (aha, Grasshopper), so there is actually more clearance on this middle bushing once installed. Are the clearances here similar to the clearances on the lower bushing?..... I suspect similar but precision measurements required unless someone has access to the design drawings.
Back to removal of the middle bushing, all the bushings have nice square edges so when the lower slams into the middle bushing it should not normally go inside but catch enough to unseat the middle bushing. But remember the middle bushing has EXPANDED and has some clearance, so one shouldn't be too rammy on that first attempt to unseat it. Use only as much force as needed, don't be excessive. Once unseated, you're good to go.
Unproven theory, the middle bushing is there to prevent flex of the inner fork tube as forces try to "bend" it (between the lower and upper bushings) when you hit hard bumps or heaven forbid have an encounter with a bambi......... superior Gen II engineering of course..... I'll tell you a Gen I fork story later.......