I hate when this happens.
pull that insert and toss it in the garbage
I bought some M6-1.0 Keensert inserts
http://www.mscdirect.com/product/36752699
Here's what I used
The keensert called for a 8.8mm install drill. I used a 23/64. I chucked up the drill but used my hands to rotate the chuck, no power. The hole is already around 8mm, not much to drill/bore.
then countersink
Then followed it with the M10-1.25 tap. (the keensert's external tap size)
screw the keensert in until it bottoms on the tabs (sorry I had to use a different hole for these pics)
then carefully drive the tabs in with a punch or what have you. There is a drive install tool but I've never used one.
Tada!
the blue tape was my perpendicular line of reference while drilling and tapping.