I'll agree with Joe, there may not be anyway for any of us on here to really see what the problem is. I agree that taking him to see a pitching coach might be your best bet. Also, you can't replace a full length mirror or video taping every time he is on a mound.
One thing that I would like to add to the discussion, which I am sure that you know about but maybe haven't thought of. Make sure that your son realizes changing his hand positioning isn't going to happen overnight. It will take many weeks of practicing that hand positioning in his mechanics.
The drill that you had mentioned before about placing the ball in his hand is a good drill to create muscle memory for hand positioning. It more than likely will not help him fix the problem in the arm path as a whole though, but it is a good start. Another drill to start with would be to have him start with his hands in the "High T" position, with the correct hand placement. This drill goes along with the first, it may not help his delievery as a whole but it will create muscle memory as to which way his hand should be facing. One last drill that you can have him do, and he can do this every day from dawn to dusk without hurting his arm, is to have him do dry deliveries. Make sure that he isnt holding a ball throughout but holding a towel or something of the like. Dry deliveries are the most underrated drill that a pitcher can do. No matter the amount of space, the weather, or daylight, a pitcher can always do dry deliveries.
Well that was my two cents, take it for what it is worth, and it may not be much. As I said before, I am not saying that any of this will fix his arm path, but it may be worth a shot. Also, if he has this small flaw in his arm path and he is 75-77, fiing this may add 1-2 MPH if not more!