I'm pretty sure the best solution is a Time-Sert thread insert.
Lots of info available on the web.

-----Original Message-----
From: Vanagon Mailing List [mailto:vanagon@gerry.vanagon.com] On Behalf Of
Tim Englund
Sent: Friday, March 09, 2012 11:32 PM
To: vanagon@GERRY.VANAGON.COM
Subject: Stripped oil plug. Helicoil or self-tapping?

Hello List,

Well, it's getting warmer in the Northwest so I'm working on Zola - my
'89 Vanagon I purchased last fall just in time to put in storage for
the winter. Well, when I took out the oil drain plug for the first
time, threads came out with it. Damn. I had thought enough were left
to still hold to plug securely, but I was wrong. It leaks now....

I did some research on the internet and found some sites (like Go
Westy) that recommended inserting a helicoil. Then, however, I spoke
with an old-time mechanic and he said no, use a slightly larger
self-tapping plug instead. I went to Napa and found one for $3.
There's a problem, however, and I haven't installed it yet because the
rubber washer and the plug's shoulders are too wide to fit snuggly
into the inset where the old washer and plug sat. Is there another
type I should be looking at? What does the collective wisdom of the
list recommend? If I went the helicoil route, I'd probably have to
have a pro do the work.

Any help is appreciated!
Tim Englund