I am having the same problem with the crank sensor on my 1999 G20. I don't think it is a good idea to grind it out and push what remains into the hole however. On my car anyway, the "crankshaft" position sensor actually sits above the starter ring gear on the flywheel in the bellhousing. So if you push it through it won't end up in the crankcase. It will fall into the bellhousing. I think there is a good chance it would get jammed into the ring gear. (Remember at the end of the sensor there is a powerful magnet - I think that could do some damage and will also prevent it from falling very far.) I think if you use a thin drill bit to drill a hole along one side of the sensor it might become easier to remove it after the o-ring is pierced. (This assumes you have something to grab onto.) I'm thinking I will try this approach.
I tried a bit of heat thinking that would loosen the stuck sensor - instead it melted some of the plastic. Oddly, this exposed the copper from the two terminals in the sensor. There was enough protruding for me to solder a proper terminal onto each of the copper bits and I used this to temporarily reconnect the harness. This made the check engine light go off. (Unlike on some cars, the crankshaft position sensor input isn't actually used by the ECU to control any engine function. I'm not sure why it is even there.)