Hey Solitus -
I just encountered the same problem you have.
It was my turn the day before a planned long ride... The front downtube mount snapped a stud right at mount surface level. Bummer. I got the needed drill bit and extractor from Ace Hardware. The stud drilled out alright, but even after heating the mount, the stud would not budge with the extractor. That blue Locktite works wonders, even when you don't want it to do so. The extractor snapped in two at mount surface level. There is no option to drill that out. The mount is unsalvagable.
Now, both our options are to remove the engine and replace parts; either the entire engine or just the case. Alternatively, find some other method to hold the front engine mount to the downtube. The bikes are still kinda ridable as is, but because the front mount is dangling, severe engine vibrations set in at a low rpm.
Now, let's put our brains in gear and keep money mostly out of sight. My mount broke because of pulling stress placed upon the studs. It looks like your mounting bolt tore out the side of the mount because your downtube is too wide for the mount. IN THE FUTURE: if you replace the engine, borrow and use a big set of Vise Grips and a lot of muscle to squeeze the downtube in the area of the mount to a racetrack shape, top to bottom. That will squeeze in the sides of the downtube to be at or just below the width needed by the engine mount. That will prevent the problem you encountered.
There are multiple things we can try at this time, keeping in mind that if we fail, we did not lose anything more except time from this point on. We are going to engineer and test our own solution. Here is my first thought, as far-fetched as it is: get a big-diameter wire (as big as you or your dad can handle; steel is preferred) and car muffler clamp that will just fit your diameter of downtube. Measure the wire and cut, making a loop on each end of the wire. Wrap the wire back up on itself three or four turns. Big wire is needed and is very hard to work with.
The wire, when finished, will be just long enough to wrap around the base of the cylinder jug (avoid wrapping around the jug, else the cylinder studs may break prematurely), and reach just over the tops of the threaded portions of the muffler clamp U-bolt. The U-bolt is placed under the downtube; the threaded arms pointed upward toward the engine. Place washers and the nuts over the wire end loops, which are pushed down on the U-bolt arms. Turn the nuts onto the U-bolt arms, drawing the wire down on the arms. That, in turn, will draw the engine case tighter to the downtube.
Try to form the wire to the shape of the engine case to eliminate slack. With luck, the wire wraps will hold, and the tight wire will prevent the engine from bouncing around while running. If you remove the other mount bolt, the engine will self-center on the downtube. Tighten the nuts just tight enough to keep the engine in place. How tight will be a judgement call. You won't know the nuts are too tight until the wire breaks or the ends unravel. When that happens, you try again.
As I stated, this is a far-fetched idea, but it is cheaper than a new engine. This is the best idea I came up with so far. This is what I am going to try.
Keep in mind that downtube squeeze with the Vise Grips if you get a new engine. That technique worked for me. Be sure to stop when the mount bolts do not touch the downtube. Don't oversqueeze. And use multiple layers of paper in the jaws to avoid excessive nasty-looking impressions in the paint.
Let me know what you do.
Thanks,
MikeJ