The Rev. Daniel Mallette, 80, was due to move out of the rectory of St. Margaret of Scotland Monday so it could be repaired, WLS-TV, Chicago, reported Wednesday.
Mallette, who has been the parish priest since 1977, has refused to move because he maintains the cardinal told him he could stay until he died.
The cardinal denies he made that statement, and Mallette says now perhaps he misunderstood his superior.
In the Chicago diocese, it is accepted routine that a departing pastor lives off the church premises for six months after the new priest arrives.
The tension over whether the elder priest would vacate his parish quarters has impacted the new parish priest, the Rev. William O'Donnell, who arrived at St. Margaret's three months ago.
He says he's been "physically intimidated" by a member of the church school and the school's principal announced his resignation Tuesday after he said O'Donnell had suspended him.
Mallette says O'Donnell has been arrogant and a bully.
O'Donnell admits that he might be part of the problem, "that perhaps I didn't do this correctly." Parents and parish members met Tuesday night to discuss the situation.