Lots of good advice here already. I'd go the helicoil route first, usually the strongest fix and will last. Be sure to coat the treads (tap) with grease to catch chips like was said above. If the helicoil fails sometime down the road you can then drill/tap to next oversize. I usually flush any extra debris out with kerosene, let it drain out. Fill with oil, run up to temp, then drain the oil again to be sure you got any other chips out. Refill and your off riding. If none of those work for you I've got extra 125 cases I could put on ebay. Good luck!
'74 ATC70 (stock for my nieces)
'84 ATC70 big carb, race cam, and piped (big boys little toy)
'84 ATC125M
'85 ATC125M
'85 ATC185S (200X carb and pipe)
'83 ATC200X (my first trike ever, avatar pic)
'85 ATC200x
'85.5 Tri-Z 250
'85 ATC250R
'79 CJ7 w/351 Cleveland
'77 XL75, '78 XL125
'88 Katana 1100
'00 King quad
'05 LTZ400