> What would you all recommend? I've been spraying it with penetrating
> oil for a couple of days. I'm not sure whether to use a screw/stud
> remover or if this is unlikely to work. Any other suggestions.

I had this happen  (and the water pump)
 blow last summer crusin through the okanagan valley in Kelowa BC
I was lucky enuff to be near the bow-wow auto parts & the parts guys told me
about a old timer
vw mech who had a farm outside Kelowa...

The solution we used takes nerves of steel
those studs are in the aluminum block, there is zero room to work will a
drill
so we stripped all the gear otta the way
(alt, p/s pump, heat tin, exhaust, oil filler, drained the oil etc)
then we cut down drill bits so we could free hand drill those studs out
(this is the nerves of steel part)
we ground the stud flat with a grinder  style bit to make the busted stud
flat
then center punched that perfect then free hand drill this in graduating
drill sizes,
and you go wrong any direction yer in the water jackets or maybe the
cylinder walls..
once we got those out we retapped over size studs

I am not sure I woulda have the guts or skill to do this myself I just took
it all a part
and put it back together the old timer did the real work :)
I am sure any VW shop would want pull the motor & line those up in a drill
press
I dont think any easy out will work those studs are seized up but good and
any easy
out you get in there will prolly snap