Your description of how he changed seems objectively neutral; but disappointing for you because you can no longer identify with him.
>he’s probably happier, but at the cost of transplanting himself to an entirely new friend group and lifestyle Honestly I don't get how you can perceive that he's happier, but still see him as having changed "for the worse".
Well, from his perspective it's a worse change in personality, but from his friend's perspective he could be happier. So he's recognizing that his friend seems happier despite the change in personality he perceives to be bad.
Is it is "for the better" for someone to be happy and ignorant/naive/delusional or to be of sound mind and unhappy? Not that this applies to the OP's post, but I've known people that have changed (by drugs or otherwise) where they've become happier, but also less mentally stable.
“I am the throne dragon holding your eternal death inside a citrine cristal, threatening to break the crystal open so that it engulfs you back into the shroud of darkness.”
Your friend has lost the plot as you suggest, or at least he didn't have the mental framework at the time in order to process what he was shown, there's still potential for that to change in the future.
If your friend acts up again, ask him what he learned from his ayahuasca experience. Give him time to tell you his answer. There is something he's almost bound to have either missed or misunderstood. I like the way Oliver Sacks puts it... “Every act of perception, is to some degree an act of creation, and every act of memory is to some degree an act of imagination.” http://www.goodreads.com/quotes/246355-every-act-of-percepti...
Enlightenment is realising your own part in the world you know, that the two are inseparable. By seeking truth you create a falsehood. You cannot obtain enlightenment by looking for it. The truth we can experience is shaped by the observer, our knowledge is born from our senses. The purpose of introspection is not to pinpoint 'the one truth' but instead understand truth from a broader perspective.
Perhaps that'll help, perhaps not, it's up to your friend to be receptive, and it's not something to worry yourself about anyway, but even so, best of luck.