"The mutual fund won't let me take out just $10,000 - they said I can take out 10% or 90% of the total $12k "
Are you sure that the mutual fund company wasn't referring to the tax-withholding amount rather than the gross distribution amount? The law requires that a default of 10% be withheld for taxes, but the law also allows you to specify zero tax withholding or more than 10% tax withholding. Some IRA custodians limit the tax withholding to less than 100% of the distribution.
