IMHO Birds has been a bit harsh on you.
Sounds to me like you were worried, and in a drunken fit did something which you regret and have done your best to apologise and try to make it up to them.
This guy sounds incredibly nasty and I find to still be holding a grudge 8 years later pretty shocking. However to involve your DN to the point where he parrots off these words about you is absolutely disgusting. NO matter what went on between you he should not be discussing it with you DN and using him in this way not matter what has happened.
I also think that your BIL is an adult and really needs to deal with this better. Either he cuts you off, forgives you and allows you to make ammends, or forgives you because it is the best thing for his wife and Nephew. However instead he has decided to be very passive aggresive on the whole, and undermining etc behind your back.
I mean if he hates you that much, how come you are hosting this party for DN. Let me guess..... he gets something out it? Is your place bigger by any chance? Or does he just hate the clearing up?
I think the best thing to do would be to avoid this man like the plague. Maybe talk to your sis and figure out a way that you can have a relationship with her and your DN's without really seeing him. Avoid him at family occassions and ask your DH to do the same. Don't allow this man to add any fuel to the fire.
With respect to his relationship with your dsis - you are going to have to try to let her make her decisions and support her. with the best will in the world you are only going to make it worse if you keep pushing her to realise how toxic he is - she needs to figure that one out on her own. let her come to you when she is ready.