What to do??

I know I spent a lot of the last post saying that I don't know what to do regarding C. . . well, guess what? I still have no clue. Making it even more difficult is the fact that every day this week, while he has been in ISS, he has been in the best mood after school. In fact, I've never seen him so happy when I pick him up from school. This tells me that the ISS is NOT an effective punishment for him, since he feels that he "won" and got what he wanted. He does not like his teacher, he acted inappropriately, and he gets a week "vacation" from his teacher. He comes home and is rude and hateful, to me, to D, and to J. He expects to not have to do his homework, since he is not in class. Last night, D and I had DVRed part of the SEC tournament to watch. When we finished dinner, we told the boys that they were welcome to watch, so long as everything was done before they came to join us. J finished up his chores so he could watch, and C sat down to finish his homework. He finished, we checked it, made him correct it, then checked and corrected again, and then he came and sat down to watch. He watched for probably 20 minutes and I remembered to ask him if he had studied for his vocabulary quiz (apparently, he gets to take the tests/quizzes and do the work, and still gets credit for it. . . ??) and he said no. He went to get up, and I told him not to bother, just to sit and watch the game, since that's what he wanted to do and it would be more fun to watch the game and fail the quiz. He then gets up and throws a temper tantrum all the way to his room, where he throws things around until he gets D's attention. . . .
I can't deal with this anymore. I really can't. It's one thing for him to be angry. I understand that he has a lot in his life to make him angry. I can even handle that D is the one who has to "deal" with everything, in fact, I welcome that. What I cannot tolerate is D letting him be rude and disrespectful to me - in my home. I cannot tolerate D letting C act this way with no consequences - in front of J, effectively teaching J that it is acceptable.
I love my husband. I love both of my sons. I am horribly afraid that I am going to have to remove J from this environment. . . meaning that I will have to remove myself, too. I am horribly afraid that this situation is going to get so far beyond our control that it becomes a black hole, sucking our family deep within, never to be seen again.
It bothers D when we try to talk about it, since he feels that he has failed as a father. Then, should I ever mention my feelings about it, it turns in to me "attacking" C and not being a good mother. . . how I "hate" him and have made that relationship so horrible that it has bled over into everything else. Because this is all somehow my fault. . . ?? Once we've calmed down, D always comes back and apologizes to me, telling me how he just gets so caught up in it that he doesn't think. . . but all he's really doing is repeating whatever C has told him. Apparently, even though I'm the adult, I'm the untrustworthy source. . . yet C has the history of compulsive lying. It makes it hard, even when all other aspects of our marriage and family are so great. This has become our elephant in the room. AND I WANT IT GONE!!!