You've gotten a lot done! Take a minute and relax. . . . . Okay, back at it! 
The dilaudin shouldn't make any difference, as it is prescription. Basically, they look at alcohol and street drugs; any lifestyle that would be detrimental to his future health. Eighteen months' sobriety is pretty darn good. The VA program here, which is where we got started, required minimum 1 year sobriety and alcohol/substance abuse counseling. So it sounds pretty much the same.
I presume you've been to the KU Liver Transplant site, but I'll post it anyway. There's a link Find A Physician where you can look up a doctor and request a callback. You might see if there's a GI or Internal Medicine physician that would help. You could even try the transplant surgeons; there are two. http://www.kumed.com/bodyside.cfm?id=1288
There is nothing wrong with hospice, in fact it's an amazing help in certain circumstances. Right now, your friend needs aggressive management of his condition; not comfort care. Hospice isn't trained to treat his condition and shouldn't be reluctant to do what's in his best interest. When our situation changed and we were getting ready to have Mark evaluated by a transplant center here in Arizona, the hospice staff went out of their way to help us get him officially removed from their service.
I would also suggest, if your friend has ascites and encephalopathy, that you ask the transplant coordinator about getting him admitted and doing some of the evaluation inpatient. It would probably be a very good idea for him to get on medications to help with the water and ammonia. Not to mention, if the evaluation tests can be done inpatient, your friend wouldn't have to wait for an outpatient appointment, which could take weeks.
No one can tell you, except the transplant evaluation team, whether your friend can be listed. But it sounds like you are giving him a really good chance at it.
Sorry for the long post and I hope I've answered some of your questions.
Please let us know how things are going. We're here for both of you.