Ariel,
Are you clamping the pintle tight to the wood before driving the screw? If you’re trying to draw that springy stainless down with a #8 that short you’ll get tearout every time. The tip of the screw doesn’t have the thread engagement to take that load. If you haven’t done that, I would refil one more time and do exactly what Jon said, but make sure you clamp the pintle tight, then drive the screw, then let the clamp off.
If that still doesn’t work (or you’re frustrated enough with screw tearout that you don’t even want to try, I’ve been there haha), I would epoxy in a 10-32 threaded insert, and then use 1/4" 10-32 machine screws (stainless). As far as what to use for a threaded insert, you have several options:
Knurled brass: intended to be glued in, will give good surface area contact, and should stay in just fine. Unsure about the availability of only 1/4" long (I’ve only used 1/4-20 and larger inserts) so you may have to cut it down. Should be available at big box stores though. Keep in mind if you’re planning to sail in saltwater, you’ll get galvanic corrosion between the brass and the stainless. Slow galvanic corrosion, but it will be there nonetheless.
A pull-through threaded insert. You can get these in stainless, they have stamped teeth on the flange that bite into the wood. Significantly better holding power and tearout resistance over a glue-in insert, but you’d be putting holes in your protective epoxy coat on the insides of the rudder cheeks. You could solve that with unthickend (or slightly thickened) epoxy on it to seal it as you draw it down. Potential major issue here is, though, that if your rudder blade has a snug fit it will likely catch on the flanges. Probably not a super viable option for you at this point but I think still worthy food for thought. If you have the clearance to try this method, GENEROUSLY slather those inserts in epoxy before drawing them down, then wipe up the excess with a rag on a stick. You want that section of the rudder absolutely fully coated in epoxy.
Finally, you could use the glue-on inserts like folks use to mount foot pedal rails in their kayaks, but on the outsides of the cheeks. The downside here would mean more epoxy work on the outsides of the cheeks and the need for careful fairing in order to not significantly increase drag. Furthermore, you would need to reshape the pintle to now fit a rudder cheek that in cross section would be shaped more like a chalice than the two straight edges it has.
A final note, you could drill and tap thickened epoxy to hold that way. The primary loading on the pintle hardware is in shear, so tearout shouldn’t be a huge issue. But on threads as small as #10 (whether coarse or fine), and depths as shallow as 1/4", well, you’ve already experienced firsthand how the epoxy will just pullout.
Hopefully something here helps, if anyone sees something I said that would be a bad idea please don’t hesitate to point it out! I’ve built a few boats, but only one rudder (for my Skerry).