2) Call a meeting with the students parents and the student present. I would have a contract ready to sign with them on the expectations that need to change.
3) Maybe give them a chance after that to shape up.
4) Dead weight at that level is even worse than a non-leadership member. If they won't get with the program absolutely remove them.
For what it's worth I've never quite reached that point with a drum major, but I certainly have with section leaders. Had to part ways with a really good flute player going into last school year for similar problems.