Great feedback and suggestions, everyone. I really appreciate the input. This is keeping me sane -- hearing that it is actually possible to get this bolt out and avoid buying a new engine. :)
I've got four of the narrow Dremel aluminum oxide grinding stones on order through Amazon since my previous bit was the only one in stock at the local hardware store.
http://www.dremel.com/en-us/Accessor....aspx?pid=8153
I think I'll see how far I can get with these to start with.
DMC5180 -- Thanks for the additional detail on your drill jig setup. This sounds much more doable than the "DIY drill press" that I was trying to imagine. I'll give something like this a try if the grinding stones don't cut it. BTW, I think I was able to grind out and past the broken extractor with the first stone that I used. It is a little hard to be sure, however. The grinding stone sort of polishes everything in there and all the surfaces are more continuous and flush with respect to each other.

