its funny this post came up. I was in the same boat, I tried to extract the buried broken stud out (the very first one from the distributor), that failed. Also during the process, I might have touch the water jacket with my pilot hole, I don't know. My heart stopped a little at that time. The engine is on the engine stand, I poured a cap of water into that hole and the liquid didn't go anywhere, but that doesn't tell me if I actually drilled thru to the water jacket or not. We'll see.
So I dremel the rest of the broken stud out with carbide bit, and I used 1/4 length of the M10x1.25 helicoil, and I installed a new stud back on. Its not very tight, but I think its enough to keep the exhaust gasket from blowing out. If coolant start sipping out of that #1 stud, I will be crying. But I guess my solution will be what alkemyst mentioned above, use RTV to seal it.
I just keep my fingercrossed and hope everything is fine.
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