My advice, to take with appropriate salt: Leave.

It's a seller's market for people with your skills right now. There's no guarantee that you'll find a new environment that doesn't have one of these cancer-in-the-locker-room culture killers, but they're not quite as common as you're fearing.

It's not just this one employee that's the problem, it's that the bad apple, the manager, and the manager's manager are all knitted together into a situation that you can't break, which is making you "miserable". You may not like the idea of leaving. But, given the information you've provided, it is your best option. (Or, maybe your least-worst option.)