I don't think there is anything you can do to make it easier/better. There horse injured to of yours (well.. you familys anyways), and the vet told you to remove dangorous horse from herd asap, there is not much you can do.
You are being very genorous in giving them free board! I havnt heard of many people doing so. I keep my horse at a friends, and even they charge me . My boyfriends family is planning to buy a farm in 2 years, and build a barn etc, and they told me I could keep my horse there but I need to pay for his food etc.
I know its hard, I recently went threw almost the same thing, my horse beat the crap out of another her, and then started chasing others around, trying to corner them, and kick them, for no apparent reason. He was immediatly moved to a feild on his own (i know you don't have the land for it), neither my horse, or I are overly fond of the new living arrangments, but he can still see and smell other horses over the fence, so for the time being, he's on his own. You godda do what you godda do. I don't like the arangments, but I also realize that, I can't risk him seriously hurting the horse again.
Your friends are moveing there horses soon, hopefully this wont affect your friendship. The best I can say is, call them after the horses are moved and make sure you keep contact. Also explain to them that its not persinal against them, or there horses, but everyones safety has to be taken into consideration.
You could offer to let them talk to the vet themselves to if that would help