Out here in the backwards west, it is common for cities to have a dispute resolution center. I'm lousy at describing these, so I'll just point you to the one for my town. When I was on the HOA board, we often guided neighbors to this service and it seemed to us to be beneficial the majority of the time.
http://www.beavertonoregon.gov/index.aspx?nid=562
Seems to me that your neighbor might not want to participate, but if you start filing police reports for the incidents and damage, he may have no choice.