There is no reason that a thread insert wont work if you can get it in there. I have one in the block of my 2.6 engine and it's held up fine for nine years. It's on one of the head bolts.

Before removing any metal I would strongly suggest talking to the place you bought the vehicle from. Explain what happened and see what they say.

87 Turbo Intercooled Raider, roller cam, torsen rear diff, LSD front diff, lockup auto with modified converter, V6 brakes, low transfer case gears...