Yesterday (late Saturday afternoon) I stripped the auto tranny pan drain plug but I was able to get out of that mess more easily than I expected.

If you ever wreck one of those drain plugs, have a try at replacing it with a new plug or screw before getting involved with tapping new threads in the pan.

After I was all done resolving it I decided to have a look in the FAQ:
http://www.brickboard.com/FAQ/700-900/TransmissionAuto.htm#StrippedTransDrainPlug
Sure enough, there were two descriptions of how to get out of this pickle.
I followed neither of those procedures but this method seems to have worked in my case:

When I first removed the plug that day the plug the threads were obviously damaged. I tried putting it back in and it spun in the hole. Unscrewing it did not get it back out. I tried using J B Weld "Quik" to bond socket to plug hex so I could pull down on it that way. JB Weld did not hold - probably due to bits of fluid trickling down onto the hex head. Patiently putting Vise-Grips on plug hex and pulling down while turning finally got it out.

The ruined plug would not let me see what its thread size was. During weekday business hours "real" parts stores are open, with full information listings, but this was Saturday, 6 pm. So I pulled the matching drain plug from our other 240 and matched it to a plain hex head metric machine screw, new from the big box auto parts store. Home Depot has this stuff too. 10 mm. x 1.5 pitch. New screw was too long so I cut it down (I like using a Dremel for that but there are other ways). Grind the new screw tip smooth of burrs. Very happily I found that the new screw would thread into the existing tranny pan hole without wandering around. When the hex head hit metal it stopped firmly, indicating decent threads still in the pan. I used a copper crush gasket that was a bit too large, but that was all the store had at 6 pm Saturday.

At the next changeout in about 6 weeks I plan to buy a few proper crush washers and put one in. I might try a new standard drain plug screw too, if available locally.

I might have used one of those "save your backside" drain plug repair screws that taps its own hole. However the smallest one stocked was 12 mm (original plug size) and my screw was clearly a 10 mm - though thread pitch was invisible. Even so, it would be chancy trying to do that without getting the car up off the ground to get a good view of the pan underside. I was able to thread the new screw in laying along side the car, reaching across to the tranny pan.

After threading the new screw in I pulled it, and ran a qt. of tranny fluid down the fill tube and right out the pan's drain. Hopefully that washed out some remaining metal filing junk. Worth the cost of the fluid.

Apparently the pan is a harder material than the screw. So if you chew it up, you might get to keep the pan and get a new screw. I'm sure it's possible to wreck the pan threads but mine seem to be pretty solid now. Of course, we knew those Volvo engineers were pretty smart. Pretty much the same with wheel studs and lug nuts. Sometimes you do need a new wheel stud, but usually it's just the lug nut that gets wrecked and you just get a new one.

I had to tell the tale. Once again, mind over matter.

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Sven: '89 245 NA, 951 ECU, expanded air dam, forward belly pan reaches oem belly pan, airbox heater upgraded, E-fan, 205/65-15 at 50 psi, IPD sways, no a/c-p/s belt, E-Codes, amber front corner reflectors, aero front face, quad horns, tach, small clock.