My favorite method of dealing with troublesome players is to completely seal off that player from in-game consequences to other players, but not to let them know that this has happened. Think of it as a honey-pot of doom: You lift the ban, and the griefer can connect and walk around as normal. He can chat and tell other players, and everything looks normal to him. But the other players never see him. He never shows up on the who list to them (or perhaps he shows up with a special flag), and his tells never reach anybody. If he tries to attack other players, he would become visible -- but he would be set at a severe disadvantage in a fight.
In this manner, the realization that he is not wanted is not so fast as a lightning bolt from the heavens and a site ban. He has to wander around a bit to figure out that it's not just the players and immortals ignoring him. Thus, it drains more of his resources to find out what has happened. One could even have a list of fake chats and tell replies sent to people flagged in this way, so the realization would come even later! The more time they spend in your honey pot, the more time you and your players are at peace.
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