I over-torqued four bolts in the lower unit of an outboard, and the
heads of three bolts broke off. I managed to remove one of the broken
bolt using a Dremel tool and a diamond grind bit. But I cannot remove
the other two broken bolts using the Dremel tool. Based on the past
posts in this newsgroup, I learn that the best option in this situation
is to drill out the broken bolts. I would like to learn the details of
the way to drill out the broken bolts. My question is:

Which size of drill bit do I need? Should it be as large as the hole
where the broken bolt is?

Related questions:

The bolts are for securing the water pump housing for the
impeller. The hole for the bolt is at the edge of the water pump base
-- meaning that one side of the hole is kind of thin -- something like
3/32" thick. The bolt itself is like 1/4" or slightly larger. Because
I have over-torqued the bolts, I found that the holes pretty much losed
most of the thread. If I drill out the bolts, I probably will find
that the holes will become even larger. If I re-thread the hole after
drilling out the bolts, I am afraid that the holes will be even larger.
I am afraid that there will not be enough metal left. Is my
estimation correct? I am wondering whether I may be better off somehow
pouring in new metal into the holes and drill new holes instead of
rethreading/enlarging the existing holes?

The other thing is that there is supposed to have a gasket on top
of the surface. I am wondering if I rethread and enlarge the holes,
there may not be enough metal at the edge of the water pump base to
bite into the gasket and prevent water from getting into the bolt. Is
this something that I need to worry about?

Thanks in advance for any info.

Jay Chan