Worn out pinion grub screw

Tried to change my pinion today but turn out the hex thread is worn out. It's too near the motor mount for me to use my dremel to cut a slot so I'm pretty much stuck. Help?


Question: The PINION grub screw is 3mm. If I drill a hole say, 2mm into the center, would a 3mm screw extractor be usable? It's the smallest size I can find. I don't think I should drill a 3mm hole instead, right?