Well, to clear up a few things...
They usually don't give a copy of the medical record until after discharge. Your BIL can request a copy of his entire record. They do have the right to charge him for the copying costs, but they cannot deny him access to his record.
The patient and/or their designated representatives can see the chart at any time during the hospital stay. It is usually recommended that the attending physician be there during the review process so that he/she can answer any questions that may come up when the patient/representative reads the chart. They do not need written permission. They need verbal permission. If someone walks into your BIL's room and says "Mr.Smith, is it OK for Mrs.Smith to look at your record" and your BIL says yes, and he is of sound mind, that's all the permission they need. Perhaps they might 2 staff members to witness your BILs approval, so that they can document it as such. In these days of HIPAA, you can't be too careful.
I would recommend retaining a lawyer. And I am not a sue-happy person, especially when it comes to the medical field, since I am a nurse. But it sounds like there is an awful lot of delays, misreadings etc. going on here which are very negatively impacting your BIL's health. As far as transferring him to another hospital...well, that will be hard to do for several reasons, the most prominent one being that no second hospital is going to want to take a case where there may have been errors made in the first hospital, because the second hospital may invariably get caught up in the melee of the subsequent lawsuit.
I do believe his wife needs to be getting a bit more assertive here. She needs to put this hospital on notice that she is less than happy with the level of care he has been receiving. If she hasn't contacted Risk Management yet, she should. At this point, she should probably also be contacting the VP of Nursing and the Chief of Surgery and the Chief of Radiology. I am sorry to say it, but she may need to be the "squeaky wheel".
My guess is when all is said and done, they won't have a bill to worry about.