I have first hand experience with EPM and reading through your post, the symptoms, while some are like EPM, don't add up. Unless your friend missed a LOT of signs along the way, EPM does not just go from normal to going down, that quickly. EPM usually starts to present itself as some sort of lameness. You said that the test for EPM came back negative. There is no "EPM test". You can test the blood and the titer count and that will give you an indication as to whether the horse has been exposed to the disease. If a blood test came back negative, that is truly a wonderful and rare thing as most horses will show positive even if they do not have the disease.
It sounds like they have now ruled out EPM and I do not know why this vet suspected EPM. I am sure there is lots that you can not clearly communicate in writing, but he may have wasted precious time when, from what I was reading did not indicate EPM, unless your friend missed a lot of warning sighs to begin with.
I hope that they are able to pinpoint what is causing this and I pray that your friend's horse has a full recovery. Please keep us posted.