DD, I've read this whole thread up to now. I agree with everyone else: you're doing the best you can, seriously. I have seen a similar experience with my younger brother and he's really shaped up his life at least in no small part because of my parents strictness in face of his actions. My little bro rocks, and I do not feel the remorse of having him for a brother that I used to. Unfortunately, I think the whole incident kind of pushed us apart at least a little bit. Maybe we would have done that anyway even if he didn't get into such trouble, just by growing up. But the family is closer than it was back then. If you stay strong, maybe in 5 years (about how long it's been for us), you'll be having a good time with your independent son again.
It is in part because of my experiences with my brother (and many others) that I never smoke, drink, or do any kind of drugs. I rarely use prescription or OTC drugs either. I believe in cleanliness, control, and true judgment ability.
By the way, I am 21 and still live with my parents during the summer (and am entirely dependent on them for my college education). But I work my ass off when I'm not taking classes and don't give them any trouble like your Jim has. I pay for my hobbies and occasional meals. If my parents decided to stop supporting me financially, I would quit school (at least for now) and get a job. I probably would have done that after graduating from HS if they didn't offer to pay for my education, too (I prefer to keep the books black).
Keep it up, and let us know how this all ends up working out for you & Jim.