Tough situation and hard to find a good resolution: the outcome of any approach is unpredictable. The first step is to persuade the GM there is a problem. The best way to the kid is through her.
There have been some good suggestions, and choosing among them is difficult. But once you chart a course, you won't feel so frustrated because you know you are working on a solution.
In my opinion, this is not a problem that can be solved in a day. First you have to talk to GM, because you can't retaliate or take action against her GS without turning her against you - then your problems will be worse.
Have her over for a visit; my approach would be to tell her you have invited her because you are concerned about the safety of her GS. explain his dangerous driving and that of his older buddies, which is also infringing upon your tranquility. Try to be objective, not accusatory. Point out that it destroys the work you put into road maintenance at no charge to her.
Or you could wait a little and let the road get torn up before inviting her (ostensibly) to discuss the road condition. In this case you can explain why why you have given up on it - this makes your point much more strongly.
Instead of accusing her GS of this and that, tell her you are not only concerned about the road but about the GS's safety. This she will care about. Avoid accusations and judgmental statements: just explain what you observe - the GS and his buddies are driving crazy and tearing up the road: one of them is going to flip his vehicle. Plus you observe the GS is driving on public roads where (apparently) he is not qualified to be.
I think I would then suggest that these older guys are likely a bad influence on your GS, and you are concerned they will get him into real trouble (drugs, leads to theft). It is not clear to me that you have any firm evidence of any wrongdoing on their part: (is there real evidence they broke into GM's house and stole her jewelry, and does she accept that as true, or is that your reasonable conclusion?) Your remark about pot appeared to be speculation; if so, just say you fear the GS may be drawn into that sort of thing, which has its dangers. (No matter the details, the conversation is presented as about protecting the GS).
If it can reasonably be demonstrated to the GM that these kids were responsible for the theft (perhaps with the GS as an accessory) then the situation is much more serious because if they stole from her, they likely steal elsewhere (to fund drugs?), getting the GS into real trouble when caught. If the GM has already rejected the idea the kids were responsible, no use mentioning it.
This conversation (or conversations) will determine whether GM will cooperate in addressing the problems. If she is convinced, then you can offer to help bring this kid around, if you wish. She can insist on him meeting with you both (at the price of banning him from her home if he does not cooperate – I am not clear if he is living there, or just hanging out). Does he regard you as a threat yet?
Where you go from here is pretty much open to circumstances and discretion. The kid needs to understand that there are driving problems you are not going to tolerate (the other matters are not really your business, unless GM wants to involve you: better to address those after you make progress over driving, I think). You have to be friendly but firm; you may be able to get some leverage if you casually let him know what you can tell the cops if the two of you don’t get along (but don't play this card unless necessary).
If you are serious about mentoring him, maybe offer to teach him how to operate a tractor. He might see that as exciting. Putting him in charge of the road for a small wage might work wonders. Tell him what an experienced equipment operator can earn. He might like to learn to work on a car or tractor or build a dragster or something. You might look for some waste land where the kids can make donuts, rather than on your road and make it be known you will call the sheriff with license plate numbers if problems continue.
I would also look into the law controlling your shared private road to strengthen your position. Is it an easement solely for residents or is it considered a public right-of-way? If the former, trespass law may come into play if you post it with the legally required signs. If it is an easement across your property, a pair of speed bumps is OK: warning signs and a posted speed limit would reduce possible liability, and give you another reason to object to wild driving. I live on such a road I mostly maintain, and built shallow drainage ditches and berms no one has complained about (without them, the road will wash out).
Good luck! P.S. I am not a lawyer!
it is 103 outside today though.. so i may not do much of anything. The cup holder sure is a life saver but in this heat i think i need a cooler holder.... 
