At first I was confused about the wheel still being on with the head being off, then I realized the lugs you are working with. The seat of that 4in lug bolt is still holding the wheel on. Someone has definitely overtightened the lug at one time or another.
I have seen someone that made a special hole saw like device that drilled through the shoulder of the remaining bolt. The tool was designed just for that lugnut. I don't know who would sell it but here are some places to try; www.asttools.com , www.technictool.com



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Steve Brotherton
Owner 24 bay BSC
Bosch Master, ASE master L1
26 years MB technician