Quick update for anyone interested. I spotted a NOS Kalloy 29.8 seatpost on eBay (quite a rare size) and picked it up for a tenner so I decided to try and get the shim out after all.
As Paddy suggested I equipped myself with a flat-head screwdriver and, for good measure, a big old chisel that had no edge to it anyway. Wasn't getting far with the screwdriver and thought if I could get theend of the chisel into the notch on one side and the side of it into the other notch I could get some leverage for twisting the shim.
Well whadyeknow! It wasn't fused after all and started to twist. Eventually I got enough to grip with plyers and the rest is history!
Seatpost fits a treat and its mahoosive so I'm thinking this bike might fit me after all
Here's some pics
Shim part way out
Then I remembered to get a shot with the chisel (obviously by then it was no longer needed)
Twisting it out with plyers (in case you just couldn't imagine what that might look like
And it's out!
Seatpost almost as long as seat tube!
And it is up to min insert - you can see the grease line