I've got a handheld impact driver kit similar to this:
http://www.tooltopia.com/lisle-29200.aspx?utm_source=googlebase&utm_medium=cse&utm_term=LIS29200&utm_campaign=googlebase_18u&gclid=CMnd-OP5hK4CFRN3hwodVGe8Yw

that I used successfully to back out the bolts on my carbs without damaging any 
of them. They looked just like yours (aka hopeless).
Mine has an adapter that allows me to put in different bits, and when I'm 
really "screwed", I use the impact driver with an EZ-out, with great success.
http://www.amazon.com/Eazypower-82681-Damaged-Screw-Removers/dp/B000HE9VZY/ref=sr_1_9?ie=UTF8&qid=1328380258&sr=8-9

Because I can be cheap and lazy sometimes, that combo is now the "correct size" 
for the two long bolts that hold my starter together. Both the bolts are 
stripped out, and look even worse than the one in your pic below, but a few 
good "taps" and the screws back right out. I reverse the impact driver to 
reinstall the bolts.

 - JO

On Feb 4, 2012, at 10:17 AM, Kevin Green wrote:

> Thanks for the assurances that soaking should help.  I'm wishing I had picked 
> up an impact driver as recommended, but I don't know if it would have helped 
> me anyways.  I was trying to loosen the last screw holding on the top cover 
> and thought it had come loose but it looks like I stripped it instead.  Will 
> an impact driver still do me any good?  Should I just drill and use a screw 
> extractor?
> 
> 
> 
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