Well I got one bolt out and re-tapped. I didn't want to get metal in the diff casing so I took a 25# 1x2.5 magnet and taped it to a paint mixing stick and put it in the casing against the opening... one problem solved, it grabbed the shavings. Next problem was how to drill it out straight without having to take it all apart to do it on the drill press. After a lot of thinking I got a drill bit that was a slightly smaller diameter and fit in the same size bolt hole with a little bit of play, then I bolted the axle housing back on to use as a guide, then I took blue painters tape and and wrapped it around the bit until it fit in the axle housing snugly and drilled it out. Cleaned out the threads with the tap. It worked perfectly.
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