Originally Posted by
cdmurphy
You want to do anything in your power to avoid breaking off the screw you have inside the dropout. That's the best handle you will ever have on the rest of the thread. Break that off, and the job goes from moderately difficult, to extremely difficult.
Try soaking in PB blaster, Kroil, or a 50/50 Acetone / ATF mix. Heat can be a big help in getting oil in there too. Use a propane torch to heat the dropout to a couple of hundred degrees, then on cooling, it will pull more oil in.
If at all possible, try screwing it in further. What probably happened was someone bent the exposed threads, then tried pulling the screw out, jambing it in pretty tight. If you can back it up (screwed in further), you can then grind or file off the nub of bad threads you've exposed. Once you loose the bad part, backing the screw out should go pretty smoothly.
This is how it would have been done in most shops. Heat almost never fails to loosen frozen parts. If there is a chance to use it without destroying paint etc, it's the go to method. In this case, the paint is gone on the dropout anyway, and there really isn't a downside to torching it.
I'd also +1 on cutting a slot for a screwdriver.
Drilling out stuff like this is really no fun at all, to say the least.