I had an IM conversation with another GM about this very issue tonight. We have a local player who enjoys causing a commotion, insulting NPCs and wrecking the party's mission. He finds it fun. Maybe he thinks it's a challenge to the GM, to see how we'll keep the adventure from going off the tracks. Maybe he's just not taking thins seriously; when the NPCs react badly, he tries to assert he was just kidding, that his character wouldn't have said such a thing or cast such a spell.
So, what do we do when he shows up for a local game day? So far, the answer is: sitting him at a table of veteran players who don't mind if he gets the party killed, and letting the chips fall where they may.
I would suggest the local GM's asking him each time he comments if he's saying that in character. If he is, then the NPC's react as the GM sees fit. Also, a '3 strikes rule', where if he seems to be commenting to an NPC but says he's only joking OOC'ly 3 times, then all further comments are to be considered IC for the rest of the session. Again, have NPC's react accordingly.
Also, apply the same thing to him casting spells OOC'ly. Once he starts burning through his prepared spells because he's being a jerk, hopefully he'll get the hint.