Well I'm slowly figuring out what's going on. Sounds like you have a model with a vertical axis drum/gypsy with a below the deck motor
. The rod you describe almost certainly is the drive from the motor
below to rotate the drum above.
At this point you really need the manual or someone that knows this particular model. So #1 priority you need to figure out the model, the exact model. S-L made several vertical model windlasses including the Anchorman and a couple of different Sprint models.
There could be a set screw holding the shaft in place, a circlip or it could be designed to slide out with the motor assembly and is just corroded in place. I would not use any force until I knew how this thing works or you could tear it up.
So, first step, figure out the model. Second step, ask for someone that knows this exact
model or find the manual. If you don't have it or can't find it go to Homepage | Simpson Lawrence Yacht Parts & Spares
who is THE source for old S-L parts
. He used to be manager at S-L in the UK and bought out all the old stuff when S-L dropped them. You can view or download a diagram of the windlass free at his website or buy the complete manual for £10.00, $15.30 at today's exchange rate.