I've had success grinding the three bolts off, and then if memory
serves me right I have often used just two bolts to reattach the new
tailpipe to the muffler flange and worked the studs out after, or drill
the studs out.  I've never been able to get all three out correctly /
completely so have reattached the tailpipe to the flange using just 2
bolts and nuts.  Not perfect but it works.

Dan Erlandson
Flemington, NJ
1991 Vanagon GL 183k
1999 Passat 1.8L 133k