If I am reading your post correctly the cage nut on the inside is now loose meaning no amount of drilling or tapping will remove it? Is this the passenger or driver side? If passenger side removing the heater or the access panel may allow you to grab it with vice grips or something. If on the driver side there is no access to it. You may be forced into replacing the area with one of the door hinge repair panels offered by many of the vendors. This is a tough one that has come up before, maybe someone who has lived through one will post.
