What would you advise?

The 'boy' needs to get a job and gig at the weekends (if he is offered any!)
I thought you were going to say that he was 18, not 35.

What???
No question that I would advise your brother to end his son's parasitic behaviour by giving him notice that the gravy train has left the station!

Yep - tell him - (he obviously knows the situation and is 'cocking a deaf 'en' as we say in our family!!)

35!! My Dad told me very clearly that once I was 21 I would not get another penny till he died. He paid his assessed contribution to my student grant till I graduated and that was that.

Your BIL must just tell him - he cannot freeload for the rest of his life!

The father has a lot to answer for. He has facilitated his son's parasitic ways and needs to call a halt now, even if he was in good health and earning a fortune. As he is neither he has no alternative. The not so young man needs to start contributing to the household or ideally move out and find his own feet.
As to how to tell him - that is really simple. Just tell it as it is!

I think I would just sit him down and tell him. He surely can't be blind to his father's state of health. At 35 it's high time he sorted his life out. He obviously knows how hard it is to get on in the music business, by now he should have though of other ways to support himself. He needs a good luck up the backside.

There is only one way to go here and the father surely knows it.
He can no longer afford it, period.

I think he needs to simply tell him exactly as you have put it. How else? Surely at 35 he can see his father's situation?