FWIW, I had a Peugeot UO-8 with the same problem. The face on the BB spindle was defective and rough, so pressing in the soft steel pin at the factory deformed the pin around the rough spots, preventing its easy removal. I tried the hand sledge (with the crank arm supported in a wooden block/cradle to avoid brinnelling/denting the BB cup), using punch until the threaded end was totally flattened. I finally drillled it out as you did, and was planning next to try using a drill bit or small abrasive bit (like a Dremel tool) to hollow it out more. I'd suggest not using heat. Try some penetrating oil now -- it might work its way in from the sides now that you've mined it out. If your spindle face is similarly rough, try to find a non-defective one -- it's very hard to file the pin to just the right angle to go in on the rough side far enough, but not too far on the other (smooth) side...and they have to have the same angle if the cranks are to line up at 180 degrees.
Reid Fisher Just threw away that mashed pin last year in San Martin, California