Everyone will have their favorite method and all the ones you mentioned are viable and will work. I will say this though .. I make 1911 grips as a hobby and the bushings have a step. There is a particular bit that you can use to drill out your grips to accommodate this step and I think I bought mine for about 25-30 bucks but in my experience its very hard to replicate the hole you need in the grips to accommodate the bushing using regular drill bits or anything else that is available at home depot so you may want to weigh that in your consideration on methods.
In theory if you are good with a drill press and use a brad point you might be able to get the hole as you need it but ... I just butchered my grips when I tried it and decided to actually buy the right tool.
Are you sure you trashed the hole or did you just cross thread. Were it me I would go to a harbor freight and get a cheap tap set. before I drilled and went larger I would see if I could just clean the hole at its current size. I have been successful more times than not just running a tap the same size as the original thread, adding some loctite and not being a gorilla when I secure whatever it is I am securing.
