Looking at yours specifically I think I'd jump right to welding a large nut on it and using a breaker bar with a pipe attached. That thing is completely round. I'm guessing (hopefully not) that you will end up breaking the head off the rest of the bolt with whatever method you use though. If so, I'd start by punching a divit directly in the center, then drilling, slowly stepping up the size until just slightly smaller than the bolt (threaded portion obviosuly). At this point, if you have a bolt extractor that size, I'd try torching the bolt, hitting it with penetrant, then giving the extractor a go. Keep a close eye on the extractor if you use one because those axle bolts are 140lb/ft plus 180 degree turn (something like that), if itstarts to twist on itself stop, if you break a bolt extractor off you are really going to be cursing because you wont be drilling that out. If it doesn't work, then continue to drill and re-tap the hole.
Just last weekend I was doing rear sway bar bushings and end links. Everything was coming apart very easily but when I got to the last end link, both bolt heads holding the mount broke off. I had to drill and retap both, bolt extractor did not work, not fun. BTW, nice vid with the air hammer, great idea. I tried dremeling a large slot in both bolts using a cutoff wheel so I could use a slot driver on a air gun but it just ended up peeling it down like a banana. The air hammer idea has a much better chance.
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