I can feel my impatience tingling just reading this. I have a 3 1/2 yrs old who is going through a testing phase right now (he started with me at 2 and I had to work with him then, then he was awesome, and now back to square one) and it's so frustrating. The difference here is that it is a clear result of Mom expecting a new baby and they just found out the sex so there has beena ton of baby talk...he's processing it and acting out in the process. It sounds like it's always been like this for this boy!
It sounds like you are handling it well on your end and yes, the parents need to get on board on their end. Also, the fact that he's not toilet trained is just gross...the only child I've ever known who was not trained at 4 had developmental delays. This might sound harsh but I might be tempted to tell them to take a 2 week break by say, the end of June wherein they work to fully train him. Sounds like there is a lot of laziness on their end.