How to remove Schlage lever mechanism?
You have to remove the retaining ring, by rotating it anticlockwise.



They make a specialized castle nut wrench for installing/removing them. You should be able to loosen it using a pair of pliers, or screw driver. Though it looks like there might be some damage to the threads, so it might take a bit of effort.

Notice right near the arrow in the image above, that there's a flat spot with no threads.  Place a slotted screwdriver against the ridge of the castle nut, and gently tap the end of the screw driver. Hopefully that will loosen the nut just enough, that you'll be able to get it off by hand.