Stripped Screw Bolts, and a Solution...and then some...

Well, nobody seems to be around to help me out with this major engine destruction (pics) and the questions I have asked in THIS THREAD
So I'll ask this question here.
I am having screw bolt problems, they are tight and soft as lead almost and they are stripping badly (how did they get them in without a scratch?!?!) and have a philips slot.
Want to replace those with allen bolts.

Anyway, I am going to my brothers place tomorrow, he has a drill press, seems to me that it would be better to drill these things out than to go out and buy 'easy outs' or whatever they are called.
I am expecting to have to tap them holes out to a larger size, should I go M10?

Can I take the halves off with the small gear still on?
If I strip my brothers gear puller as well, how else can I get the dang thing off, propane?

Tried my impact driver, had to stop was making too much noise (notice time above), didn't work, but probably because of bad angles, or surfaces, may give it another shot tomorrow.
I took my vice grips, an impact philips bit in it and an adjustable to twist and got one loose, quite a snap when it let go.
But man they are in there tight!

OK, tried it again, turns out my technique was wrong. I was trying to let the tool do all the work, I found that I had to supply a bit of torque myself instead of just wacking it with a hammer.
All but two came loose, and that's because there was simply nothing for the bit to grab on to.
But the fortunate part is that the half where the screw bolts go in is not threaded, so I can drill off the bolt heads and I am home free!
(except of course that small pinion gear)

I got my impact driver from a Foley Belsaw small engine course I took about 23 years ago, first time I actually got use out of it, I greased it up with some lithium grease before I took on this task.

Thanks Man!