I ended up taking the whole headlight out. Is there some tip or trick that someone here has used that I can put in a different more available adjustment setup? The dealership can no longer get them and what remains is insanely expensive. Any help is appreciated. Thanks.
I ended up taking the dremel and making the phillips into flat head screws. And I ordered a new kit of all 3 screws with bushings off of EBay, but they have to come from the UK.
I ground down part of a nut and it fit right onto the stripped plastic piece.
I also made a couple all metal adjuster pieces when a plastic piece broke.
That's been my experience too, the 20 year old plastic strips and there is no aftermarket item that fits our particular cars (if you have a mk2) and VW does not care to provide a replacement and the only ones I've found are used or on ebay from europe.
I made a few metal headlight adjusters for the MK1:

Also ground down a nut so it would fit down in the right area, when the threads would no longer grip the plastic: