It sounds like you are talking about the retaining screws -- 1 per light usually -- that hold the light into the pool niche?

If so, there's no magic wand, especially when the pool is filled. The screws shouldn't be rusted: the originals were SS or brass. If they ARE rusted, there have been some sub-standard repairs in the past -- and the screws are very likely to break when you apply more force. If they are NOT rusted, you might be able to grab the head of the screws with vise-grip pliers, and turn them that way.

Otherwise, you'll probably have to wait till you can safely drain the pool to that level to remove them, UNLESS you want to tackle the 'using air powered tools underwater' process. If you can't safely drain the pool to that level, this may be your only option.

I'll begin with a caution: I've used air powered tools underwater, and it's a pain.

=> Ideally, you'll need SCUBA and extra weights. It's hard enough to do this, even if you aren't trying to breathe when water splashes into your snorkle, or when you tend to float up.
=> You usually can't see what you are doing, once you turn the tool own, because of all the bubbles.
=> You need a 'tender', who can pull you up if something goes wrong. (I nearly drowned once, because I ran out of air, while working by myself at 13' feet under water . . . with 40lbs of EXTRA weight in a 2nd belt and my BC pockets. Stoopid, I know.)
=> Unless you are both careful and lucky, you'll probably lose the tools you use.
=> You'll need to rent a compressor -- few home compressors can come anywhere close to the 18 CFM requirement of the die grinder.

If you are STILL interested, assuming you have a niche somewhat like this:


the repair process involved for a typical like is this:

1. Use the die grinder and carbide burr to remove the head of the retaining screw.
2. Uncoil the light cord, and tie the light out of the way.
3. Attempt to use a vise-grip to unscrew the (headless) retaining screw from the light niche threaded tab.
4. If not possible, grind the screw off flush with the tab.
5. *Gently* center-punch the flat end of the embedded screw. Use a spring loaded center punch; hammer punching the dent can break the brass tab.
6. Use a 1/16" drill to drill out the screw. Gradually enlarge the hole with successively larger bits, till you can remove the screw. You *may* be able to remove it with a 5/64" or 3/32" bit, wedged into the hole, by turning the head of the drill. Be careful to avoid drilling out the threads. (You'll need a fairly decent dive mask to see what you are doing!)
7. Once you have the old screw removed, and have repaired the lights, re-install the lights with new SS or brass screws.
8. Clean up your tools -- if you want to save them --
=> immerse them in alcohol to remove water, then blow them off to remove water.
=> immerse them in WD-40 or kerosene to remove remaining alcohol; blow them off, and blow some air through the tool
=> lubricate them internally with air tool lube, operate, repeat, operate, repeat.

Obviously, this approach depends on your having a niche somewhat like the one show. There are also various niche repair gizzmos which may (or may not) work with your niche. And, you may be able to 'twist off' the retaining screw head, without grinding it off. You might be able to find an EZ-out to help, but I haven't seen ones small enough to work in a 5/64" hole.

Good luck!

Ingersoll Rand 1/4" Air Die Grinder 3107G (18 CFM)
Ingersoll Rand 3/8" Air Drill Keyless Chuck 7811G (4 CFM)

Astro Pneumatic 2181 Double Cut Carbide Rotary Burr Set with 1/4-Inch Shank
TEKTON 6580 Automatic Center Punch
Mibro 871570 17-Piece Titanium Extra Life Metal Master Drill Bit Set

Lucas Oil 10200 Air Tool Lubricant - 1 Quart
TCP GlobalŪ Brand 1/4" Mini Oiler / Lubricator - Automatic Mini In-line Air Tool Oiler
WD-40 10110 Heavy Duty Gallon Can (Pack of 4) (check for local availability)
Equate: First Aid Antiseptic 91% Isopropyl Alcohol, 32 Fl Oz - Walmart. Avoid the 70% Isopropyl; you want to REMOVE water, not add more.

DEWALT DXCMH1608WB 8-Gallon Honda Gas Powered Air Compressor (9 CFM)
Jenny G8HGA-8P 8-HP 8-Gallon Single Stage Portable Compressor (16 CFM)