Here's a thought... If you can still thread a cable in it, why not use those inline barrel adjusters that are generally near the STIs. So basically the setup would be... rear derailleur, about a 1" piece of housing, followed by this inline adjuster, followed by the rest of the housing.

Or..take a drill bit on the opposite side and see if you can get it to thread out?? Perhaps using some PB blaster to loosen it?

To answer your question, you can pretty much use any shimano rear deraillieur except for pre-1997 dura ace.