outlining reasons why I think the onus is on OP to do the right thing (because as you stated, we're not here to counsel the sub or fret over his reputation or consequences of his behavior), so I won't redundantly re-state them here.
Thank god! After the first million times you stated your hard line black and white stance where no reason is too good to be ignored, I don't think I could take a million and one!
Elecracoyote. how long after the OP informed him he wouldn't be on the gig should it take for him to get back to the OP and tell him this isn't cool and he still needs to be paid? can you really wait a month before saying anything?
Apparently forever. Imagining 2 90 year olds sitting on the porch in Boca. "Hey, bassist buddy, remember that gig I was supposed to sub for your band in aught 15, but then you found a full time drummer for the band and didn't need me any more? Well I had turned down doing an open mic with my neice's Jem cover band at the local Chuck E Cheese's, so you need to pay me half, plus interest. Should come to about 12,000 dollars. Good thing too, I got dialysis comin up on thursday, and them things aint cheap!"
OP maintains a clean reputation as a man of his word.
He was never in danger of losing it.
When I talked to him in October about cancelling the gig schedule, he never mentioned anything about him declining any potential gig or anything like that...only this December did he mentioned that he declined gigs for us on that particular date.
GigS? Like multiple? I call BS. So here we are in October, and in a few day period, he just HAPPENED to get offers for MULTIPLE other gigs on THE SAME DATE 2 months out? And in the couple more days it took for you to relieve him of his duties (which he agreed to at the time), he couldn't call those gigs back and get ONE of them secured? Everything about that is a lie.
Here's the thing. OP contacted sub for gig 2 months out. I assume at the same time is when sub told OP that he would bail if offered something for more money (which obviously all these other alleged gig offers must have been for less). Which immediately establishes that this is a "right to work" marriage of convenience, where either side can break the agreement if something better comes along. Turnabout is fair play, so if the drummer wanted those terms, fine, but then he has to live by them as well.
Now, well within a week, OP's band finds a permanent guy, so of course they're going to want to use him for aforementioned gig. OP tells sub. It is at this point and this point only (although in practice about a week's window would be courteous, so he could get back in touch with the other gigs), for the sub to bring up the "all the gigs" that he "turned down" (*cough*BS*cough*), and say, hey, I already turned down gigs that night, so I'd prefer to still play it, or at least get paid half if you guys just want to use your new drummer.
At this point (2 months ago), the OP could have either agreed to keep the sub on the gig, and have the bands drummer start the following gig, or to just pay the guy the half (I imagine the band would have just used the sub instead of paying for 1.5 drummers).
But now, after many weeks, the sub bringing this stuff up just sounds totally bogus. I don't believe he was anguishing in the darkness over what happened. I think he just saw an opportunity to get some money without doing anything and he took a shot at it. The saddest thing is that the OP has decided to fall for this scam (with the help of coyote and other scam enablers). If you haven't already told him you're going to pay him, I wouldn't. If you're still dead set on wasting money on this scumbag though you could at least ask him on the spot what gigs he turned down (and maybe verify them if possible). But I wouldn't give him a cent. Frankly anything more than a month out, you're free and clear, unless there's some explicit agreement to the contrary beforehand. Cancelling 2 months before and then the guy comes back a week before the gig, he's just looking for a handout, not justice.