It should be inserted a lot further than that. Take a look at this article Marc did on Melevs Reef for an idea of what it should look like and how to do it:
Melevsreef.com - How to change the RO membrane
Melevsreef.com - How to change the RO membrane

and that's probably why I can't get it to budge. Any idea how I can remove it without breaking the housing?

