Try a long shank brace & bit wood bit as they have that screw section prior to the cutter engaging but I reckon that leather washer is rock hard and your going to have to dig it out bit by bit, also if you have a square shanked blade you can get a 12" shifter onto it for leverage if you can get to the slot the butt will come out even if the bolt wont. Then when you get it off you can figure how to remove the bolt from the butt as the remnants from the washer may cause the head to bind in the hole and tapping it out may put to much stress on the wrist cracking it. Extremes I know but these things can happen and then you really are in a pickle.

What if you melted some dubbin or have a liquid leather revitalizer soak the washer in that to soften it then dig it out just another angle.