[Brian in Tucson]

When I did my engine swap I was sooo lucky not to break any of the exhaust fasteners. Mine were relatively rust free, still I put them back together with new fasteners and antisieze cream.

I had other stuff I had to drill out. I bought a new Irwin drill bit set, rather inexpensive, at ACE. I think it was about $30. You are correct, get the best drill bit set you can afford, start with smaller sizes & work up, use lots of oil and slow speeds on the drill. There may be some special tool for removing the flange bolt remains, but if there is I'm not aware of it. New, relatively high quality drill bits do make a difference. I've had good results with Bosch sets, too.