personally, I like Helicoils, so much so that I sometimes put them in on new threads in aluminium castings to beef them up, as Norton did on the ally head ES2s etc.
Yes, its possible to build the (bare) case up with weld and machine it but I've seen a few cases ruined this way by distortion, and although modern ally welding techniques are better, I'd avoid trying that until all other options were used up, especially on something as sensitive as your final drive case. There's also a product called lumiweld which uses zinc alloy at low temperatures but I've not used it myself.
My own inclination would be to strip it, drill it oversize and make a bush from Phosphor Bronze or similar, tapped internally to take your original plug (which I'm guessing will probably gently knock out with a drift from the inside), to screw into the case and be loctited in, although it is visible, once done its actually better than new. Its an old fashioned way of repairing it, but if we didn't think old fashioned was best we wouldn't ride these bikes, would we?
Good luck with it
I worked, actually, and only dripped a very slight amount.
While my /3 was down from an accident, I had the case welded, then milled and tapped, and things are back to normal.
easy fix, grease the tap, and you don't even have to worry about flushing it out
good idea to flush it just the same
if you don't have access to the tap charts, post the hole diameter you have and I'll look and see what I can find for you
if you take two small screwdrivers and lever the head of the bolt as though you were pulling it out, this will likely give you good results assisting you getting the bolt out of the stripped bolts
just takes an extra pair of hands to hold both small levers while another turns the bolt
a nice little 3/8 air impact will burn it right out with only slight pressure on two levers
Can anyone suggest the best fix for this, I suspect I will have to disassemble, take the cast housing (including the drain plug) to a machine shop and have them drill it out, I am not a fan of the helicoil fix so was wondering if anyone has an alternate suggestion, I have tried the helicoil fix on another bike and it still leaked slightly. can the cast (thread area) be built up then retapped?
Free beer for the best suggestion, even more beer if you come over and fix it for me.