I was diagnosed with this in July 1995. From all the research and reading I've done on narcolepsy, medication and behavioral modification is the ONLY treatment. If the ritalin isn't working for your husband, have him ask his doctor about Cylert and Provigil. These other two medications should have less side effects. Also, I agree with you that he should cut the caffeine at night and should try to get to sleep before 3 am.
Second opinions are always a good idea.
Check with your insurance company to see if there is another option for you. Most of all, your husband needs your support during this. There are support groups out there for patients and their families. Please find one to help you and your husband cope with the changes that your going through.