I think I understand the issues you have raised. I see several solutions to the problems you have mentioned.
But first I feel I should mention something. The whole card thing wasn't about greed. I don't care if I have the card or Shwika or Attila the Hun does. It was about not liking idiotic behavior on Stormwind's part being rewarded. No matter what he does, he can walk away unscathed. I like the idea of the card being buried a lot better. So the actual motivation was to spite fate, not to satisfy greed.
Here are the solutions I came up with In order of most to least extreme:
1) New character. I retire Khadgar and play Stormwinds shocker lizard instead. Although extreme, this does solve all the issues you mentioned. The shocker lizard is not offensive to other party members, has no valuables to speak of, it is not socially advantaged, it is not overpowered, it will be unable to recruit armies and is very limited in its functionality. Also, it solves the problem of you having to introduce a new character.
2) Radical alignment change. He gets hit with a powerful cleric spell or visited by Bob Marley's ghost etc. that makes him go lawful. I could do this myself without any such event, but it wouldn't make sense and would seem wierd to the other players. Additionally, if he were to go lawful good then he could turn into mother Teresa and give away all his money and belongings and be on more fair ground with everyone else.
3) The book of Job solution. Take away the things you don't like. Maybe a competetor slanders him, burns down his house and hires thugs of his own to rob Khadgar, leaving him without station or assets. He can then rely on the charity of the university staff for the means to research a spell or two every now and then.
4) I homogenize Khadghar. To solve the current problems I can:
a) Stop trying to recruit armies or spend money on anything except wizarding
b) stop taking my share of party winnings since I already have too much
c) I bury the card with the intent of digging it up in 10 years when nobody is looking for it anymore and insure that all scrying attempts, including my own, fail. In the meantime Stormwind's ghostly parents can tell him where it is buried or something.
d) Find a reason to disarm the defenses on my house and stop socializing with aristocracy (though I'm still puzzled as to why these are an issue)
Solving future problems is the real issue. The only way I know how to do that is to play an uncomplicated character and stop doing plot sidelines. Yes I read your response, but the fact remains that you dislike every one of the sideline ideas I have attempted as well as the personality of the character. The best way I know to prevent future problems is to dissolve both.
This is what leads me to think that playing a shocker lizard may be preferable. It's totally uncomplicated, party friendly, and yet still mildly interesting.
Just let me know what is most preferable.
After much eye-rolling, I told him to just roll up a new character.
I've been thinking about it and I think we can keep Khadgar. I've come up with a long list of ideas of how to get rid of or return the card. Also, I think I can cut down on shopping trips and spend money pretty exclusively on just wizard stuff now.
As for other things you don't like, rather than asking people to create new characters, I think it would be better to just state which behaviors you don't want in your campaign. It is perfectly reasonable to ban robbing, attacking or otherwise harming other party members. Also, if you don't want people to be evil, say so (be sure to define evil for us though).
As for the alignment problem, I think it may be more widespread than you realize. Khadgar was not the first person to try stealing from a party member, or even the second. He was the THIRD. In addition to Shwika brazenly robbing people, Stormwind tried robbing Khadgar FIRST! The only difference was that he was an idiot about it and failed.
As for being outright evil, I think Khadgar is no worse than Shwika, Stormwind or Thugwar. Thugwar (despite Khadgar advising him to let it go), beat an innocent man senseless because he felt like it. Stormwind hires people and marches them to their deaths. Stormwind recklessly but knowingly endangers human life at every possible occasion. Both Stormwind and Thugwar killed clerics when they should have run (again against the advice of Khadgar). Thugwar and Stormwind have commited murder, and Khadgar has not (nor was it part of the plan to do so). Shwika framed innocent people for theft and set kingdoms on a course for war. She doesn't care about people being killed, as shown by smashing the elemental gems. She wouldn't have had a qualm if innocent people were massacred. Actually, Khadgar is the only one to have shown an enemy mercy (Oroc). If he weren't there Oroc would have been killed in battle with all the others.
Thus, if I need to roll up a new character, I feel that so should Shwika, Stormwind and Thugwar. However, I don't think that is necessary. Just tell us what you want and we can play by those rules.
To which I responded...
I feel like you keep missing the point.
Robbing someone isn't in and of itself chaotic evil. It *IS* chaotic, yes, but you can be chaotic good and still rob someone if you felt like it was helping someone else (ie, Robin Hood). So your argument there does not hold merit. Shwika and Stormwind are both kind of chaotic - I think Shwika even has it stated on her sheet. That was never something in dispute. As far as "defining evil," really now, having been a DM, you should have a pretty good idea what this means. If you are uncertain as e else has been playing, I direct you to http://www.wizards.com/default.asp?x=dnd/dnd/20001222b - answer for the character in question.
Thugwar's fistfight with Bruce was not evil. He created an extensive background for his character, and while Bruce the Bear was innocent of the kidnapping, he has been guilty of a whole host of things towards Thugwar and his family. In addition, Thugwar's killing the cleric was not evil, as it was not premeditated. It wasn't the best or the smartest thing to do, but still not Evil. (And Khadgar didn't tell him not to; Khadgar was out flying around with the brazier.)
I would not call Stormwind evil. Yes, one of the teamsters on his expedition died, but he did not hire them with the intent to kill them - it was a most unfortunate accident. And as for "recklessly but knowingly endanger[ing] human life at every possible occasion"? Please, elaborate. The wereboar thing was kind of reckless, but he labored to protect the farmer's family, rather than running off and letting it eat them for dinner. In reviewing my notes, that's the only major reckless incident I have recorded. Also, he did not kill a cleric last session. A few of them got low on hit points, but no one died. Perhaps you would care to enlightenme on my oversights?
I won;t deny that those who run Shwika's organization are quite chaotic evil. However, I'm not sure that extends to Shwika; she is being compelled to commit these acts. Were she to refuse, she would be killed immediately. I suppose it's possible that she could be considered chaotic evil; however, she has not caused any bodily harm to party members.
Overall, however, the reason I have asked you to roll up a new character is not simply because your alignment is going down the crapper. It is because, after discussing with Thugwar and Stormwind, there's no longer any conceiveable way to keep the party together. As soon as you get back to Vanwisse, they're going to take you to a temple for questioning with a Zone of Truth or Discern Lies, and then that will be the end of it. It doesn't matter if Khadgar lives or dies; he won't be accompanying the party on any more adventures.
I'm a believer in letting you do what you want and letting you reap the consequences in-game. As a former DM, you should know enough to figure out whether it will be something that is helpful or harmful to the party as a whole. And don't say I didn't warn you that robbing Stormwind would be bad mojo. Remember, that's why you put the card back on him the first time!
My decision still stands - I would really prefer that you roll up a new character. I suppose Lauren can if she really, really wants to, but her character will still have good reasons to stay with the party (that I will not elaborate on at this time). Please let me know what you come up with. And if you are interested in exploring unusual character options (ie, a humanoid race found in the monster manual, or a race found someplace other than the core rulebooks), let me know and I'll tell you what's kosher.
If you read this far, I'm terribly impressed with you. : At any rate, he should have a new character next session.
I'm not looking for advice, really - your advice previously was fabulous and well-taken. But if you're in the mood to rant about annoying people and Munchkinness, well, here's your chance. :D