Thanks for posting pictures! I noticed that you have shocks from a later model, (they are thermal flow).

Just to echo what Enduronut said, you will have to pay money to fix the front wheel. 70% of the motorcycles stopping power is from the front wheel, so it is good to spend the money to make it right. Another Yamaha Enduro Fan, went over the handle bars, when his front end locked up, and he suffered brain damage.

To answer this question: "I may be able to cut the bad threads off, rethread it, and buy a new bolt. If that does not work what would you recommend?"

Below is just my opinion...

If you cut the bad threads off you are losing some of the adjustment length. Also, the metal has been worn down, re-threading it wouldn't really fix it. To have it fixed, you would need to build up the metal, by welding, then you would need to put it in a lathe, and lastly re-thread it.

The cost to have this fixed would likely cost more then buying one from Ebay.