The slot you cut for a flat blade screwdriver probably hurts more than helps. The dremel wheel doesn't just remove metal, it also displaces and moves it around which has staked the screw in making it harder to remove.
You should have drilled it out, starting with a very small drill bit and slowly going larger one drill bit size at a time. Leave enough of the screw's shell for an extrator to "bite" into without also biting into the hole's threads you want to save. If it were a Phillips slot to begin with, it have centered your bit. A broken bolt or Flat blade slot will make it harder to center but it can be done. Center punch it before drilling. It needs to be centered so you don't damage the threads. With a hole all the way through the center of the screw, the tension on the threads is reduced and the remaining "shell" will come out easier with a good extractor.
If I were you, I would drill and extract. Don't drill all the way through unless your sure it's centered. Go to Lowes and get a Grabit extractor, get the pack with 4 sizes, tools are an investment.
http://www.aldn.com/Pages/grabitPro.php
You will also need a reversible drill. A 3/8" drill will back out small screws, larger screws will need the torque of a 1/2" drill to back out. I find the Grabit drill bit end doesn't work all that well so I use a regular drill bit of about the same size. Yesterday, I tore down an old Honda 350 twin that had 20 side cover screws. I used the proper JIS screwdrivers (not Phillips head although they look like it). The JIS drivers still cammed out of 5 of the screws. If I had used a Phillips driver the number would probably been 18! The Grabit extractors removed the stripped and stuck 5 screws. I did have 1 screw that needed the center of it drilled out to take some thread tension off
In the future, use penetrating oil on bolts/screws and get an impact screwdriver if you have remove screws to removing for the first time. A little more work to start with but a whole lot of grief and time saved in the long run. For penetrating oil, I have used Kroil and PB Blaster but I seem to have more sucess with Liquid Wrench.
Good luck with it.