Reading the comments so far, it's interesting to see the pendulum swing.
You can count the eccentrics who have been banned for behaving in a similar manner on the fingers of an old carpenter's hand. I'm recommend restating the ground rules, then if he, or anyone else, violates them, simply pull the account and let's move on. No special dispensations.
That having been said, remember Guyfawkes? He was abusive and rude, opinionated and supremely arrogant, but I don't recall that he was ever foul*, and if you treated him with respect, he did the same to you. I was never on the receiving end of his vitriol, though we went back and forth a few times. Guy was frequently brilliant and insightful, occasionally wrong, but he was always entertaining, and on the whole, he added a lot of spice to the goings on around here. And I, for one, really miss him.
If one considers bending the rules to accommodate the contributions of individuals with "special" personalities, I think that decision must be made bearing in mind the benefit/detriment ratio of said individual.
Quinn
* but he sure said "bollocks" a lot. Don't know what it means, but it sounds bad.