Colloids may be treated as "big atoms" so that they are good models for atomic and molecular systems. Colloidal hard disks are, therefore, good models for 2d materials, and although their phase behavior is well characterized, rheology has received relatively little attention. Here, we exploit a novel, particle-resolved, experimental setup and complementary computer simulations to measure the shear rheology of quasi-hard-disk colloids in extreme confinement. In particular, we confine quasi-2d hard disks in a circular "corral" comprised of 27 particles held in optical traps. Confinement and shear suppress hexagonal ordering that would occur in the bulk and create a layered fluid. We measure the rheology of our system by balancing drag and driving forces on each layer. Given the extreme confinement, it is remarkable that our system exhibits rheological behavior very similar to unconfined 2d and 3d hard particle systems, characterized by a dynamic yield stress and shear-thinning of comparable magnitude. By quantifying particle motion perpendicular to shear, we show that particles become more tightly confined to their layers with no concomitant increase in density upon increasing the shear rate. Shear thinning is, therefore, a consequence of a reduction in dissipation due to weakening in interactions between layers as the shear rate increases. We reproduce our experiments with Brownian dynamics simulations with Hydrodynamic Interactions (HI) included at the level of the Rotne-Prager tensor. That the inclusion of HI is necessary to reproduce our experiments is evidence of their importance in transmission of momentum through the system.