Normally, if you apply for a green card (or any change of status) while in the States, the person can stay here while his case is 'pending'. Of course, that's water under the bridge at this point. I am not familiar with the fact that he had to fulfill the J-1 requirement of two years back home; that's new, I think. When INS changed to Homeland Security, there were many changes to some visa stipulations. Here is some information from their website in case you don't have it on your Favorites list. :)
http://travel.state.gov/visa/temp/info/info_1296.html
Anyway, yeah, the best bet for you is to get into EFL while you're there. There are always people with money willing to pay for that. And make sure you have a working permit before you approach businesses. Many businesses will pay for their employees (or their spouses) to take English classes and you could charge less than the established classes in the city.
If you can get a hold of a copy of the International Herald Tribune (is that the name? I forget...), you might be able to get more leads. Best of luck.