I guess we all know what he 'should' have done on this long journey but it is clear his dream is more important than any of the things he gave up. No doubt at each life changing event it made him question what he was doing - yet his choice remained the same.
There is no reason for him, even with 200 hours tuition, not to move on and complete an ATPL but I agree with everyone else, he needs to take a break, maybe get some flying in on maintenence flights so he can learn from observation. Give himself some thinking time to better understand the processes.
I was once told student performance is the best indicator of an instructor's ability. Ability being made up from years of training people with a wide variation of skills and problems. This knowledge should allow an instructor to know what the student is thinking, solving a problem by interupting an ingrained thought process [leading to a physical response] and replacing with the desired one.
You have a training aim, a fixed point, and there are defined steps to get the desired result. It's not rocket science to discover which of the steps is causing the problem and apply a suitable resolution [and practice] then move forward to the next issue. Maybe the school should have made the decision to give the guy a break and take him on observation/maintinence flights in the first place?
When someone has an issue and the instructor is unable to identify the root cause and apply a solution then they should have asked another instructor to assist. If the student is unable to make a 'step' toward a training outcome and no solution in the instructors' bag of tricks works then it's time to be honest and tell the student you are unable to train them past this specific issue.
At least the student can go away, knowing what the issue actually is, and ask other schools if they can help work this problem out. I bet there is an instructor out there who has trained someone else past this problem in the past.