I replaced my cold and hot water valves a while back and now it seems like it's time to replace the diverter. When running the water to the tub, some water comes out of the shower head. I've tried to disassemble the diverter valve as much as I can but I can't get the stem out. I've tried spraying some penetrating oil in but nothing seems to budge.
So I guess my question is: what next? Does the stem just pull out at this point or is this large nut (~1 1/8") supposed to be removed first? I can't make either budge.
Here are some pictures.
With cover removed:
Stem with retaining piece removed:
Click for full size image