Thanks everyone for your input.
I don't believe the existing threads are salvageable and even if they were, there would always be lingering doubt. BMW has an oversize plug for a good reason - I'm willing to bet ham fisted mechanics screw up these threads all the time. There's plenty of material on the housing to allow going to an oversize plug. The trick will be to drill and tap squarely without showering the internals with chips and debris. I watched a You Tube video tonight highlighting the grease method of catching chips - it was hilarious. All he succeeded in doing was dropping a big blob of contaminated grease into the spark plug hole he was repairing. He eventually retrieved it with a shop vac.
I like your idea, Plaka, of using positive compressed air (I believe that's what you mean) to keep debris out as I drill and tap. Could probably do it with the drain hole on its side rather than it facing up to lessen the effects of gravity.
Alternately, I could open up the gearbox again (already replaced the seals and gasket) but would prefer not to.
Overall, the larger plug has the advantage of being a more permanent solution - there's evidence to suggest inserts sometimes fail on components that are often removed and everything I've read about airhead transmissions indicates oil should be changed regularly.
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