That is good news! Since you are already planning on rebuilding the head, it is much less of a problem to fix this at the same time.
Not all engine builders can aluminum head weld, you might need to ask around. The best VW Diesel engine rebuilders should have no problem with this (and might as well get any cracks around the valves on the combustion chamber surfaces also welded up at the same time!)
yup thats why I have a TDI in my caddy instead of a 1.6TD ..you can crack em installing them too don't use a racket with a long handle....i still have the head....
thanks
Deo
Thanks for the tip Malone. Unfortunately, I was pushing toward the head when it happened :? 
It makes things even more mysterious. Ohhh the drama!
At least the prognosis is good. In my Quantum I push/pull longitudinally. Surely this is the safest direction. I also naturally [don't we all] oppose the non-twisting leverage by pulling/pushing of the centre stem....
Good luck
Hmm, I use an impact...
just kidding..
I am wondering if heat could help..
Also, would it be better to try this on a really warm engine rather than cold?
Been there done that...
I cracked mine on the old 1.6 NA engine that was orginally in the Rabbit that I have... Mine was so bad the piece actually fell off. I took it to an experienced welder and he was able to weld it for me and it worked fine. Never had a problem with it. Injector screwed in and still sealed as well... I think you could still use it if you want. My repair cost me like $45 at the time...
Joe
Exactly what happened to me ~15yrs ago on my 1.6TD when I removed injectors to rebuild. Steel injector was somewhat seized in alum head after 260k km, being warm might of helped, working it back & forth a little may have helped too instead of winding it right out like I did
Fortunately, QuickTD & his brother welded mine. Due to my then uneasiness with 'major' work like pulling a head :roll: they actually did it on the car!
Made it more difficult for space, and would have been nicer to weld if it was entirely heated. It cracked beside the new weld & had to be done again.
Come to think of it, I have no idea why they put up with me :lol:
But it did work, and saved the head, never had any problems with it for the next 110k km I had it.
So long as the sealing surface is intact, and the threads are repaired well enough to hold the injector in, you're fine.
I second the idea of applying anti-seize on reinstall. Be sure to use the good copper stuff.