I ran into the same problem.
Pretty much like you said, I drilled the holes out (all four of them) to 5/16" and then installed four bolts and nuts with lockwashers. It has worked well, so far. Oh, and like suggested, I took a grinder to the back of the yoke where the nut will be and gave it a little more clearance and made sure the nut will sit flush with the yoke.
Good luck drilling through your busted bolt without having your bit wander off to the side...I've found the yoke material is a lot softer than a bolt/extractor/drill bit combination. /forums/images/graemlins/ignore.gif /forums/images/graemlins/grin.gif /forums/images/graemlins/thumb.gif