Sounds as though someone was on a 7 month vacation from reality and responsibility and hit the pier thinkin he was still at sea. Maybe Mrs. Bobbit didn't have a bad idea at the time, oh wait sorry that was rude.
The kids pretty much have DH figured out D17 for sure, that's good and bad. Good they see thru his lies, bad for the walls that are building higher towards shutting him out, and the hurt of missing him for so long to be shot down in wanting 'their' time. My hugs and prayers go out to them.
So now as FG would say it's time to 'do work'. Time to lay down boundaries when he gets back. He needs to know that you will not accept this behavior and it is not tolerated if you chose to let him stay, doesn't sound like the BIL/SIL's house will be any different. No you can't control him, but you sure can control yourself and what happens around the kids. Remember there is nothing wrong with anger as long as it is constructive to hold it in can be dangerous, builds up to a point where it will burst like a balloon. You have every right to be honest and upfront.
Remember what you have turned into and who you did it for, this is the strength to draw from. You also have a wide support group use it and learn from it. You know what's right and how to accomplish it use the tools to stay your path. Now as hard as it will be remember family means well but stay true to yourself and your convictions on the course you have chosen...