Hi Damian,
The plugs or bungs should be fairly easy to remove. They'll sometimes come out easily if you just stick and awl or icepick into the center and pry a bit. Other ways include (1) drilling a starter hole and driving in a screw to give you some mechanical advantage, (2) drilling a significant hole and then using a fine chisel to break out the remainder, and (3) drilling out completely using a brad-point drill bit or a forstner bit. The problem with the last suggestion is that the top of the bolt- underneath the bung- could really bugger up the cutting end of a good brad-point or forstner bit.
When the bugs are out, you should be able to push the bolts up and out. Then you might want to re-built the strength of the gunwale a bit, maybe using some CPES and plugging the hole with solid wood and after the glue has set, re-drilling for the new bolt. You can buy new tapered bungs from a variety of sources, or if you'll do this with any regularity or want to do it well, purchase a set of plug cutters. They're not too expensive, and you can make your own bungs to better match the wood you're working with.
Its a good thing you're wanting to do this well. While the Old Town diamond-head bolts are nice pieces of hardware, there's not much prettier than that beautiful uninterrupted expanse of mahogany on those early AA-grade Old Towns from before the diamond-head bolts were made.
Michael