If the cap is on the side that goes into the steerer, it has to come off. Is the cap anything like the clear plastic cap on the steerer in this photo it has to come off: http://sheldonbrown.com/images/pop-top-stem.jpg

Maybe if you try loosening the allen bolt on the top it might come off easier.

maybe this helps:
http://sheldonbrown.com/handsup.html#threaded