I agree with Max here, drum mutes are the way to go.
Well Ant, I, like you live in the UK and I know that drumming is frowned upon by many people. It doesn't help that many drummers here live in terraced houses either (me included).
Fortunately, I have never had your problem. But I also use mute pads and believe me they are worth every penny, they don't detract from the feel of playing an acoustic kit, all they do is reduce the sound but by bout 95% which is still more than enough volume for you to hear what you are doing
I think this whole situation is ridiculous, that guy obviously needs to have his head shoved in a bass drum and have a double pedal taped to his ass, with an angry you or George Kolias sitting on a stool directly behind him.
On a serious note though, this whole situation is still ridiculous! I can say in all fairness you will not have your property seized or whatever but I really admire you for staying calm and collected about the whole thing. My neighbours who are very good friends of ours allow me to play 1 hour per day about 4 days a week, on the other days I have band practices. But they have their house up for sale and I really am dreading anyone who buys the house and has a serious problem with my drumming cause I just don't know if I could cope with losing my practice time. Maybe my drumming is putting people off buying =P but yeah you can only do as much as you can before someone becomes very unreasonable.
Most of the time it is them being unreasonable rather than you.