I've always had good luck with helicoils. Being a machinist might help with that though.
I don't think a helicoil is the solution here though, there's a LOT of damage there; one tap size bigger wouldn't cut it either, I don't think.
One thing you could do would be to buy something like a male 1/2" NPT to female 1/8" NPT fitting, drill out a monster hole, tap it 1/2" NPT, then thread the fitting in permanently. Use a 1/8" NPT male plug as your oil plug. NPT (National Pipe Thread) is tapered, so it would be self sealing on the aluminum case without any need for teflon tape/pipe dope.
Like this:

You'd have to drill a huge fucking hole to thread the 1/2" NPT plug in, but it would get rid of all that damaged material. You can get 'em made out of aluminium too, there's all kinds on eƁay.
This post was edited by Slaytanic454 on Oct 28 2013 07:31pm