Thank you so much for your response. I can wholeheartedly related to what you have been through with you sister, especially when you said it's almost like she is happy her life (to her) is worse off than anyone else's. That sounds so much like my dad's outlook.
I've done a good amount of research and I took a lot of Psychology classes through all of my schooling well through college and I kept a lot of my books so I used those as resources as well. My best assumption from all of my readings is that he suffers from Paranoid Personality Disorder (PPD) which is actually a quite common Personality Disorder. It is defined as:
People with PPD are always on guard, believing that others are constantly trying to demean, harm, or threaten them. These generally unfounded beliefs, as well as their habits of blame and distrust, might interfere with their ability to form close relationships. People with this disorder:
People with PPD are always on guard, believing that others are constantly trying to demean, harm, or threaten them. These generally unfounded beliefs, as well as their habits of blame and distrust, might interfere with their ability to form close relationships. People with this disorder:
Doubt the commitment, loyalty, or trustworthiness of others, believing others are using or deceiving them
Are reluctant to confide in others or reveal personal information due to a fear that the information will be used against them
Are unforgiving and hold grudges
Are hypersensitive and take criticism poorly
Read hidden meanings in the innocent remarks or casual looks of others
Perceive attacks on their character that are not apparent to others; they generally react with anger and are quick to retaliate
Have recurrent suspicions, without reason, that their spouses or lovers are being unfaithful
Are generally cold and distant in their relationships with others, and might become controlling and jealous
Cannot see their role in problems or conflicts and believe they are always right
Have difficulty relaxing
Are hostile, stubborn, and argumentative

When I came across this disorder it was the only one that I felt really hit the nail on the head with a majority of my dad's actions and reactions to everything and everyone. I don't think I'll ever be able to get him the help he needs, he had taken it upon himself to diagnose the "people" who harass him as being narcissists, gas lighters, and the like.
I'm so sorry for your mother, I can only imagine what this all must be like for her. My grandmother doesn't even know the half of what is going on with my dad because she just gets so overwhelmed and heartbroken every time we talk about my dad. She's going to have to sell the house she's lived in for the past 46 years because she can't afford to keep up with it anymore because my dad has depleted the rest of her savings.
It's really nice to hear from someone who can relate to suck a terrible situation, only my mom and my serious boyfriend know the full extent of everything with my dad. It's hard for my mom because she and my dad haven't been together for fifteen plus years because of his inability to be around her friends/family and because of the way he treated her but she hates that because he is my dad that I can't so easily remove myself from the situation because I love him and I know if I stop seeing him or talking to him so much he won't have anyone anymore and that breaks my heart.