I don't think violence within a family setting is ever something to advise. I have some experience in this, though my story is a little different from Diane's. My nephew was a very smart guy, graduated from college, got a good job and had a wife and son. He seemed to be doing well. But he suffered from an undiagnosed condition...bipolar disorder, and his mood swings were exaggerated by an increasing reliance on alcohol. His life came crashing down and he had to move back in with his mother (my sister). It ruined her marriage and was a direct cause of her divorce, but she stuck with him, even when he came apart at the seams and was on the verge of violence with her and me. Believe me, if we had been violent with him, it would have been tragic.
He lived with me for a while, when there was no where else to go. And he hid his addiction to alcohol pretty well, until the depressive stage of his bipolar condition would drop him into a funk from which he couldn't get out. Treatments, medication, rehab, all of that nearly ruined my sister's finances, but we kept trying to help.
Sometimes there isn't a solution. Doesn't mean you don't try. I do think that establishing a set of rules while he lived with me or with my sister helped him, but it wasn't enough. It certainly wasn't enough to stop him drinking, and rehab never came close to stopping it. He died in his sleep from a combination of too much alcohol and the prescribed medication for his bipolar condition.
So for Diane's situation, I'd recommend making a few rules for her nephew. No drugs anywhere near the house, no stealing, go to work and don't rely on her to make sure that he goes. Diane's older sons and other family members should have a little talk with him to make sure he understands these things if he is to remain in her house. And he should make it a priority that once he has the financial means, it would be best to get his own place. Her generosity should be seen as a boost, not a semi-permanent solution.