I just went through this. You are correct the dowel pins are REALLY hard and even with a carbide tipped drill bit it is very difficult to drill. I did the heat deal and managed to get one out. The other-no way. I finally ground 2 flats on it and once I turned it with a wrench, I could work it out.
For the best solution for longer dowel pins check these:
http://www.robbmcperformance.com/products/dowels.html