Grinding out the ring could be tricky. Anything that would grind out the ring might grind off stuff you don't want to grind off. I've used the Dremel bit tool to grind metal. It's really made for that, not for drilling holes. Makes sense. A Dremel tool is designed for high rpms, not torque. It isn't really designed for drilling through hard materials.
Make light passes over the surface to get comfortable with the rate the bit grinds and keep grinding until you make a break. It might work if the clip is so rusted there's nothing much left of it to grab onto. Still, I would want to get the whole ring lifted up with nothing left behind. The idea of scraping pieces of rusted fused on ring is something I'd want to avoid.
I didn't find the right solution from the Internet.
References: http://coffeegeek.com/forums/espresso/l ... sso/337134
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