I had the exact same problem with the staff being stuck in the wall, I was able to retrieve it (with the help of an 8 year old kid). Although I could not pick the item up directly, what I was able to do was move it to the centre of the room and pick it up from there. I had saved over my existing save game as soon as I defeated Josephina, so if I had not been able to do that then I would have lost a lot more than 3 hours!!
