I took some comp time this afternoon and zipped out to the hangar. Ron M., the local AME, took a close look at my spark plug hole problem. He thought that the piece of thread hanging out was the end of the helicoil, not a piece of the aluminum thread as I had thought. I cut a piece off with my diagonal cutters - it was much harder than aluminum, and it stuck to a magnet, so Ron was right.

He thought the cylinder was likely OK, but that the helicoil would need to be replaced. I grabbed the end with needle nose pliers, pulled it towards the centre of the spark plug and then gently twisted to unscrew it. It came out very easily.

Ron said that if it was his cylinder he would replace the helicoil himself with the cylinder still on the engine, but that he didn't want to do it on someone else's cylinder. I'm not comfortable doing it myself, so I'm going to call an AME with much more engine experience and see if he will drive over to do the job.