Got it sussed.... he leaves the bikes at the caravan site during the week and some scumbag has stolen the good rear wheel and substituted it for a crappy 24" wheel, which explains why nothing matches and the bearings and freehub are knackered while the bike is in relatively new condition.
Time to phone around a few LBSs for a new wheel, I reckon.
This had a great outcome: took the bike and wheel to LBS where the bloke assured me that the wheel is a 26" rim but just a crappy one with an extremely loose fit for the tyre. Had a look through the odd wheels they had hanging from the ceiling (as they all do) and with the agreement of my neighbour I bought a DT Swiss wheel with a Mavic rim for £49.99 and took it home. This had to be a better bet than struggling with the rubbish wheel, fitting a new freehub, servicing the axle and then finding that the crappy rim was deformed.
Got the disc off the crappy wheel without damaging the bolt heads, cleaned it up and refitted it to the new wheel with some locking compound on the bolts, fitted the tyre and cassette, dropped it into the frame and.....bingo! It worked! No need to adjust the brake or the gears, neighbour's daughter jumped on the bike and rode off happy as Larry.
Real shame that you had to do it though, I can't quite believe that someone went to the trouble to swap the rear wheel out rather than just nicking it.
Surely a "neighbour" hoping it wouldn't be noticed?