If you hit the wedge from the bottom, you will only make it tighter. Try loosening the stem bolt all the way, then whacking it down with a mallet. That should pop the wedge loose from the bottom of the stem. If the wedge drops out the bottom of the fork, then you can use the iron rod (if necessary) to knock the stem out of the steerer. If the wedge can't drop through the bottom, you may have to cut the stem and replace it as well as the fork.