The problem is that I cannot screw in the screw because the helicoil spring pressure is holding it out like that. So I can't get the threads started. Should I try loctite and clamping it into the bottom for a while?
Can you grab the tail end off the insert with a needle-nose pliers and twist it back out?
The installation tool is made for installation.
A Heli-coil insert tends to bind if you try to back it out from the inside tang using the installation tool.
If you can back it out... I would trim a full coil off of another insert before attempting to re-install.
^ Good Answer
An internal-head allen screw just might get past that extra helicoil thread.
If you can score the insert with a jeweler's file... You may be able to break off that "extra" thread with an allen screw holding the rest of it in place.
Removing the allen screw should then flatten any burr which should allow a bolt to thread back into the crank.