Hi, I'd like to help you with your problem.
It sounds like your grandson is having problems in school with his grades and with his behavior. You said he is stealing, lying and his grades have dropped.
So far, it seems you and his family have done all the right things. Those steps are all good ways to help him control his behavior. However, since they are not working, something else needs to happen.
I would highly recommend you or his parents try counseling for him. There are several things counseling can address. For example, what is the root of his problems? Are there family changes, an introduction of a new person in his life, or someone important leaving or dying? Have drugs and/or alcohol become an issue? These are some of the important issues that need explored and a counselor is qualified to help your grandson and your family come to terms with whatever is going on and provide guidelines to help resolve this issue.
Your grandson would also benefit with seeing a counselor because it is a neural setting where he may feel things are more equal and therefore be more willing to talk about whatever is going on.
You have several choices when finding a counselor. If your family attends church, the pastor can either help or provide a referral. Talk with your grandson's regular doctor for a referral or the local community mental health center can also help.
Continue to set boundaries with him and stick with them. Children do much better when parents are consistent and stick to what they say. The child may not like it now, but in the long run they respect consistency and firm guidance.
Sending him away to another school should be an absolute last resort and used only if his behavior becomes uncontrollable and all the other options are exhausted. There is a chance he may see being sent away as a rejection, especially if his problems are temporary and/or a reaction to something going on in his environment and therefore easier to solve.
A few books that may help you are 10 Days to a Less Defiant Child: The Breakthrough Program for Overcoming Your Child's Difficult Behavior by Jeffrey Bernstein and Redirecting Children's Behavior by Kathryn J. Kvols, Bill Riedler, and Parenting Press. These both are available on Amazon.com or your local library may be able to get them for you.
I hope this has helped you,