Thanks everyone for your suggestions. I'm calling my mechanic first thing tomorrow. He only works on Volvos and Saab's so should have run into this before. I take it to always use anti-seize compound when replacing plugs?

Snap-on and K & D, and likely other manufacturers make a thread chaser that expands. The expansion mechanism works similar to the locking mechanism of a bicycle handlebar.

In the contracted state the diameter is smaller than the spark plug hole. You insert the tool into the bunged up hole, expand it at the bottom where there are still good threads and back the tool out of the spark plug hole. I have been fortunate and never had to try this tool, but to me it seems like the best chance for restoring the existing threads. Call your mechanic and see if he has one?

Dan

Snap-on and K & D, and likely other manufacturers make a thread chaser that expands. The expansion mechanism works similar to the locking mechanism of a bicycle handlebar.

In the contracted state the diameter is smaller than the spark plug hole. You insert the tool into the bunged up hole, expand it at the bottom where there are still good threads and back the tool out of the spark plug hole. I have been fortunate and never had to try this tool, but to me it seems like the best chance for restoring the existing threads. Call your mechanic and see if he has one?

Dan

It's LIKELY that the damage is already done. Lots of people have screwed up the threads on #4, but it can happen to any of the plugs. The front 3 are just easier for access.
It's probably going to come out with aluminum chips on it. It is POSSIBLE that a new plug, and a bit of care will fix it without further work. You can try to re-tap or "chase" the original threads with a spark plug tap. This has some chance of success but don't be too disappointed if it doesn't do it. Starting the tap will be critical to success. It MUST go in at the right angle or it'll just make things worse.
At that point, or if you just want to skip that step, there are kits to rethread plug holes. KD TOOLS makes a GREAT kit including a tap/install tool and steel inserts. NAPA and some other auto parts stores carry these. The part you install is an insert shaped a bit like a top hat, it has a ring that limits the depth of insertion. The kit includes different length inserts usually.
You start the tap into the hole and continue until it's cut new threads all the way in. I've used a ratchet & socket to drive these and it works well enough. Apply bearing grease to the tap so that chips stick to that, and don't fall into the head. Once the hole is rethreaded, screw the insert into the hole until it bottoms out. Apply never-seize to the spark plug threads and install the plug into the insert. This can be done in the car without removing the head USUALLY. Worst case though, the head may have to come off to go to a machine shop for this same work. The idea is to avoid that step.
Make sure the piston in that cylinder is down below half way before starting- you don't want the tap to hit the piston. You WILL get some aluminum chips into the hole no matter what. There's not much that can be done about this- you can turn the engine over with no plug in it for a few seconds to help blow them out (it'll be noisy). Otherwise, don't worry about them, they'll be gone first time it runs.
Good luck with it.
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Rob Bareiss, New London CT ::: '87 244DL/M47- 230K, 88 744GLE- 220K, 82 245T-181K Also responsible for the care and feeding of: 88 745GLE, 231K, 87 244DL, 239K, 94 855GLT 189K

If you only began to strip the threads, then you can repair them by purchasing a thread chaser at an auto supply store. Put a little grease on this to trap particles, and carefully screw it in. Make absolutely sure it is straight as it goes in. One trick to getting it started correctly is to turn it in reverse (counterclockwise) while gently pressing down until you feel it go past the thread starting spot, then turn it the right way.

See the 700/900 FAQ for more tips.