Today is my next opportunity to try to remove it(due to work). So I was thinking if the nut free spins, if i were to cut the nut off in segments(along the bolt not through it), then wouldn't I be able to just pull off the last part of the nut with some vice grips and not even have to cut the bolt? Then I could just remove the old bolt and replace with a fresh bolt and nut? I haven't had to cut nuts/bolts off many times so if I only get one shot to do it right I want to make sure it counts.
Note: my bike is not the same type of wheel your having problem with, just throwing this out here anyway in case parts maybe exist before you begin to work on the damaged axle.
I had threads messed up on an axle I use on my Briggs Bike. Note I only ride using CA OHV License Offroad. I have no pedals, just foot pegs from used Honda 125 parts I got on Ebay.
The rear wheel with a belt sheave, is actually a heavy gauge spoke front wheel connected through some gearing down.
As for the replacing the axle for $10 from a 3rd party on Amazon, see the link.
WheelMaster HUB AXLE WM RR/FT 3/8x165mmx26T SOLIDCRMO
Different 3rd party sellers on Amazon I bought the Wheel Master Axle that fit the Wheel Master Front Wheel I have been using.
Maybe my case is easy that it does not involve a coaster brake hub as you have.
Just if parts are necessary for repair of a coaster brake hub type rear axle, if something is messed up in removing the stripped parts you mention of, parts might exist to get at a reasonable price.
I have heard coaster brakes on motorbikes are not the best idea, I have the V-Brakes that use the rim.
Better yet if affordable to you, disk brakes or drum brakes seem to be nice to acquire. Understandably, cost might not be what you want to chose this for that reason.
Pictures if you can take and post, so I can get an idea what you might need, or others here that know that they have delt with the same problem.
MT