Hi All
Thanks for all the great tips. I was unable to locate a left hand drill bit. I did find a special carbide bit made to drill hardened steel. I bought a 1/8 and a 3/16 inch bit plus a right angle drill attachment. I drilled most of the way thru the stud with the 1/8 inch bit. The stud was very hard. I then used the 3/16 and drilled all the way thru. I also used drill collars to prevent from going to deep. I tried picking out the remains of the stud, but they were frozen into the head. I had a 17/64 HSS bit, the size to use when taping an 8x1.25 bolthole. I drilled the hole with the 17/64 and retapped the hole. Worked great.
Some tips that might help others. Use cutting oil when drilling out the stud. Before drilling use a punch to dimple stud center. Use a mirror and flashlight to insure dimple is centered on stud. Also use mirror to check hole while drilling. Used a tapered tap and a flat-bottomed tap to thread hole. When drilling hold the drill parallel to the block to insure hole gets drilled straight.

Cost to repair stud not including gasket.

Stud $1.25
Right Angle drill attachment (Harbor Freight) $20.00
Hardened drill bits $9.00
Tap $2.50

Thanks Again
Brad