I am so sorry for the loss of your cat. This was a painful story to read, and I am saddened to hear about another dispicable, unresponsible owner that disregards the aggresiveness in their pets.
I do agree with “i luve my pitbull” in alerting the proper authorities. You are not dealing with the average person who is ignorant about rehabilitating aggresive dogs, you are dealing with a harden drug dealer. He needs to be accountable for not only what happend with your cat, but for other heinous acts as well.
Maybe you can alert the authorities, but tell them that you want to try to get the dog rehabilitated and not put to sleep because of the irresponsible ownership of your neighbor.
Once again, I am so sorry for the loss of your cat. I own one too and it breaks my heart to read a story like this. But you are a very nice, warm-hearted person and I applaud your virtuosity. I know most of us are in the States, but we are here to support you with any advice or questions that you might have.