What could be the long term damage from pushing the body back and the headstock forward for a sort of whammy effect. I've seen it done before and tried it a few times but I'm afraid of snapping the neck on my guitar.
This is normal, it happens with me all the time.. The reason is that its a delicate pressure point for an acoustic guitar. If you would accidentally drop your guitar on this pin, it would probably split the body of your guitar so alot of manufacturers make it removable for shipping and stuff. Go to a music store and try a different one if yours won't stay in.
Caution: don't even think of gluing it .