Thanks everyone for the advice! I was able to drill out the old threads and install a helicoil without pulling the head. It took a couple of times and a couple of dead heli-coils (which I was fortunatly able to extract) before I got it right. The bolt is now in and holding good torque. Since I didn't know what the torque spec on this bolt is I set it 20Nm and let it go. Hopefully thats not too tight.
for the record, the bolt is M8x1.25
Again, thanks all for the suggestions and to the next guy who does this, it sucks, but it's fixable!
Scott