Nasty ! I had same problem some years ago. Applying mole grips just deformed the lugs on the top of the filter element and further effort just broke the housing round the threads. It's a fairly poor design but later ones have a small bump which you can just feel when replacing the filter. Don't try to go beyound this. It also helps to put some silicone grease round the thread and O ring before fitting the filter. Filtapac sell a metal tool which is much better than the plastic ones.
Sof far as removing the stock elemnet, I think if would try destroying it gently from the centre - make a hole souch that you can get the blade of a mini saw - without the handle - in and cut gently towards the threads. A couple of cuts like this may relieve the stress around the thread and thus allow you to unscrew the remains. If you do break the housing, frankly I would be tempted not to replace it but to go for a straightforward pump connector and then an in-line filter (Filtapac again) where you can get at it.
Hope this helps and good luck.