The local garage that did a wheel balance and rotation tightened one of the bolts on my 87 300 sdl so tight I couldn't get it off. So I went back and they got the extra long breaking bar out and proceeded to break off the head of the bolt.
Well $200 later, the local foreign car mechanic got it off by having a machine shop make a tool that he put on the his air wrench. We were thinking for a while it was going to be major expensive, like the new axle you are talking about.
It will be interesting to see if any of the experts here have any other ideas. I know the local mechanic and I were stumped for about 4 days.
He even tried welding the head of the bolt back on but it snapped right off. I understand it is a somewhat common problem.