I would be reluctant to apply oil or other rust preventative liquid in a quantity that would run down under the barrel. I think that would do more damage the wood, than having rust on the barrel.
If you can only see one end of the pin, and I assume the end of the pin is flush with the wood surface, how do you know it is stuck, or how stuck it is? Crazy thought here, get one of those really strong rare earth magnets and wiggle the barrel a little while applying the magnet? Actually, the idea Smylee had is the only way I can think of to get the barrel out.
Once you have the barrel out, file slots in the lugs so the wood can move a little.
-Ron