Try attacking that busted screw with your soldering iron cranked right up..
Hold the tip on the screw and heat it until it starts to smoke, let it cool down and try the rubber band trick again.
Sorry to hijack here, you just reminded me of something with the "heat up" trick. I've got a rabbiting bit stuck in my router and I'm afraid it's there for life. I cant push the locking button in enough to hold the collet, that nut just don't wanna budge. Any ideas man?
The only thing I can think is to run it in timber until the nut is hot enough to possibly come loose. Any ideas would be greatly appreciated.