You can buy a new Yankee Hill barrel nut cheaply from Brownell's. They keep popping up, ever time I am looking at handguards. So cutting or destroying the barrel nut is not a big deal, you have already done plenty of damage. I would slice it, but not all the way through. Then get a chisel and finish breaking it where you cut it. You should be able to spin it off easily at that point. If not, slice the barrel nut on the other side also, then finish splitting it along the cut, with a chisel, also. Then you should be able to remove both pieces of the barrel nut.
I have two Yankee Hill handguards. I found Brownell's sells a Yankee Hill barrel nut wrench, it's pretty cheap also. I was having trouble tightening the lock ring, that you lock the handguard with and I also had trouble tightening or loosening the barrel nut with the AR 15 tool I have. The Yankee Hill barrel nut wrench works very well.
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