here is what I have tried out and it worked for me in my senario.
1) Delete publication and subscriptions.
2) Disable publication and distribution.
3) Reset replication and this time move distribution db to another server.
4) Add publication
5) While adding subscription, uncheck initialize to synchronized publisher and subscriber at first shot.
Basically you are removing entire replication setup and resetting it again with distribution database being on another server, but this time you are not setting replication to synchronized database at both end.
Your replication will start working fine immediately since both dbs are all ready in sync. I have test above solution in my environment and now will do the same changes in production.