At this point I would go get a Heli-coil set in 3/8-16 thread.
Try and get all of the old bolt out with a set of picks you can get them at an FLAPS.
If that does not work ,mount the water pump back on the engine and use the hole as a guild to drill the hole for the heli-coil,in the set it will tell you what size bit to use.Go slow with the bit thru the hole in the water pump it will keep the bit striaght.That should clean out the hole than tap with the tap in the kit install the heli-coil and you should be good to go.
Pete
