Suppose someone (not me) answered a question, but in a way that was extremely grammatically stilted and littered with typing mistakes (such as accidentally skipped words) such that it's unlikely someone not familiar with the area would be able to decipher it. Assuming I am familiar with the area and am pretty sure I know what the answerer is trying to say, should I edit and rewrite the answer? Should I add another answer with the rewrite and credit the original answer, maybe encouraging the OP to accept the original answer instead of mine? Or should I do something else?
Go ahead and edit! To quote the privileges page for editing on when you should edit posts:
Any time you feel you can make the post better, and are inclined to do so. Editing is encouraged!
Correcting significant spelling and grammatical mistakes in a mathematically correct answer, so that non-experts can understand and learn from it, is a perfect example of a good edit.
If you feel that editing would be too much, you should post your own answer. If you feel that you shouldn't get any reputation from that then you can always mark your answer as community wiki.
I'd first try to comment to the original answerer, and suggest they give a complete overhaul to their answer; if after some days there is no reply; I'd post an edit as a separate answer.
Whether or not the new answer is community wiki depends on how much work I have put into the answer. Remember that even in the academic world there are many papers which don't have any original content, and just clean and clarify previously published proofs. This has a lot of value to it, and I don't see any reason to feel that you don't deserve the reputation for it -- especially if the amount of work you've put into editing is equal to writing an answer of your own.