I am happy to report the little fecker is out!
New drill bits arrived today so third night in a row straight out to the garage after work without eating, not something I do lightly. They were definitely better, this time I could just see tiny particles of metallic dust falling out, but 20 mins later the hole was still only 4mm. It took another half an hour of constant drilling, with changes of hand and battery when it got tired to get through, though it did look as if it was in a bit of an angle. Miraculously though, I got a screw extractor halfway in when it went loose, and pulling it out, the bolt came out in two pieces. Cleaned up the thread with a tap and all sorted. Thank f*ck for that!
The new bolts haven't arrived so the ARB is not going back on yet, but all the threads have been cleaned up ready and I'm going to take the opportunity to drop the springs another 5mm at the back just to get it absolutely level.