What some people fail to get is that no one goes off because they don’t believe, its because they don’t care. Even the guys who have all their arguments against being religious have some story that explains why they aren’t religious. No one throws out the way they were raised for intellectual reasons its all emotional. You get to the point where you believe in everything but don’t care enough to keep it.
I am religious now but went through my own battles. I really strengthened when I joined the army. the point I’m trying to make is that you got to get him into a better situation. Whether that means getting him to a yeshiva that doesn’t put crazy pressure on the students or getting him to get a job. The main point is productivity, without that its hard to care about anything.
Its very easy to try to stay in the same place I kept trying to make it work and wasted a lot of time. I personally am not quite sure where your son is in life; what you call a bad crowd can be just a group of disillusioned yeshiva guys who don’t do much wrong. On the other hand these guys can be doing serious stuff. You keep mentioning that you wish he would love his school. You have to get that idea out of your head. Stop living with what “should have been” and start dealing with the reality. Instead of dreaming that he will be the next gadol hador and start trying to get him to be a frum happy productive adult. The main thing is, get used to the idea that he may not be making it in this yeshiva or possibly in yeshiva in general and come with an alternative.