Jedi Knight, eh? Isn't it so that a sith lord's favourite hobby is to mop up the floor with little jedi? A dark jedi master would want to have a duel with the knight, and would make sure he's dead. Then he would do something nasty to the knights retinue, but he'd not bother to check whether they're dead. You know, your run-of-the-mill cave-in that doesn't kill the heores.
Or, he'd be hit witzh an old artifact that drains the force out of you (Jedi Knight 3: Jedi Academy had such an item). He'd still be a 7th-level jedi, but with no jedi powers (effective jedi level 0, no force feats usable, all ranks in the force skills unusalbe). His current xp would be on ice and he'd get a different set of points that determine how much of his force power he'll regain. He'd be a 7th-level character with the proper BAB, Defense bonus, Saves and VP, but would have no force powers. This should work out. After all, he retains his wisdom and can keep on teaching his apprentice.
This change will be the major event in the first game session. Let him show off his "5uper10r j3d1 m@5t@ sk177z" for an hour or so, and then hit him.
You can also see how he behaves in the time before his power will be drained. Be sure to get them in several situations that are ideal for you to gauge his reactions - and the better he behaves, the faster he'll regain his XP! If he behaves the part, he'll get alternate XP as if he were level 3 (or even level 1). If it becomes clear that he only wanted to be the big nob, he'll get awarded alternate XP as a 7th-level character. The same goes for his behavior after the change: Let the draining be the final event of the first session, and later tell him that he can still act as the master to his apprentice - he just can't use the force himself. Like a driving teacher without legs. Can't be a driver, but can be a teacher. If he accepts it, let him advance on par with the party (or a little slower, at least at first, since he has the advantage of 4 extra levels worth of bab, defense and so on). If he balks about it, let him hang behind.
I wouldn't fear losing your place to play: If he throws the game and kicks you out, you'll know that he's an utter idiot and not worthy of your DM time. To be sure, listen around for alternative places to play, maybe in a hobby store, so you'll be prepared if push comes to shove.
