Best way to repair busted pipe in garage wall?


I just found the pipe leading to an outside faucet has busted. Probably due to frozen pipe in the winter.
I see two ways to fix this:
(1) saw off the drywall and replace the busted section. Then patch drywall. Pros: looks neat. Cons: need to repair drywall, and the pipe may bust again in the future.
(2) saw off the pipe leading into the wall and reroute the pipe along the wall (instead of into the wall) and then poke a hole to the outside and install a new faucet. Pros: no need to cut and repair drywall, and being inside the garage, the new pipe is less likely to freeze. Cons: does not look as neat.
http://www.smugmug.com/gallery/11860751_WQLNu
The smaller, red valve is the shutoff to the outside faucet. The copper pipe on the wall is the hot water relief outlet and is not related to this problem.
BTW, before winter I closed the valve inside the garage and opened the faucet outside the garage. No water came out. This must mean the water stayed inside the pipe, which is why it busted. Is there a way to make the water come out?
Also, the shutoff valve is lower than the outside faucet. I believe the pipe inside the wall first turns upward, and then slope downward toward the outside faucet. I know it slope downward because I cut a hole in the drywall.
Any other tips related to this repair?
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*Redo the entire run with the pipe sloped towards the outside. Change the inside shutoff valve to one that allows you to bleed or tee up with another valve that allows air into the line after the inside shutoff valve is closed. Insulate the pipe the entire length whether it is inside or outside the wall. You can also add heat tape to that just in case.
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One thing important. Remove the hose, in the fall.
As to this application. The photos are very helpful. Does the water come from the cellar? Perhaps the shut off valve should be in the cellar. And right after the shut off, another hose bib (garden hose faucet) so you can drain the water out of the pipe.
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Christopher A. Young
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due
Since you must locate and repair the hole, this will let you add a winter shutoff valve upstream and uphill of the faucet.
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Don Phillipson
Carlsbad Springs
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Either way will work. I prefer the neater-looking method. Insulate the new pipe, maybe wrap with heating tape if your winters are very cold.
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