Here's a sketch that might help. I think this is close to what Lord Sheldon is saying. Leaving the tire on will also help. I find it's best to use a very large screw driver with a nice square tip - no round over (I don't have a suitable punch). A sharp tip will keep you in the notch. The longer the better so you can get a good solid smack at it without interference by the rim. I don't mean wailing at it - it really doesn't take too hard of a blow if it's a straight-on strike. Hold the driver/punch at the tip as Sheldon says. Keep the tip nice and square as you deliver the blow. The more square the blow, the easier it will begin to migrate around.

Using a screwdriver like the one in the pic seems too light to me. They don't have the mass to deliver the blow to the bottom of the notch unless you whack it numerous times, hence the deformation you talk about.

If you use WD-40, put it where the ring meets the shell rim. Once you get the thing going, the whole rest of the hub will come out of the shell. If your strike is well delivered, you won't need WD.

http://i13.tinypic.com/2wm41n9.jpg