I'm lucky enough to have a good drummer in my band. His sense of tempo and timing is very good. He is the conductor and the glue that holds the band together and rarely forgets his cues. He can count to 4 better than any of us.
 
The only problem is that he's too frickin' loud. In a big room or an outdoor venue he projects power and confidence. But when we play a small room we have to choose between driving the audience to the far end of the bar or turning the whole performance into a 4-hour drum solo. To make matters worse, the bass player feels obligated to match the drums' volume, and unfortunately he's no Jack Bruce.
 
Long ago I played with a drummer who'd managed to address this with light sticks, gel heads and a light touch. But I don't remember the details and don't know what to suggest that won't kill Mark's mojo.
 
Electronic drums would be the obvious answer, but he can't afford them. At least not the high-end kits I've looked at, which run upwards of 10 grand, not counting amplification.
 
So I'm appealing to drummers out there who've dealt with this issue to give me some ideas.

I too can be a very heavy-handed player.
 
I use bundle sticks (e.g., Pro Mark Hot Rods) when I am playing pop/rock and contemporary Christian stuff in church.  It allows me the ability to NOT focus on my volume ... as it is not a natural thing to do (i.e., keep the volume under control) when playing straight rock stuff.
 
They are twice the price of regular sticks and last half as long, but make a major difference in volume.

Thin heads with moon gel or duct tape applied. Thinner sticks. Thin cymbals. The snare is usually the biggest problem. You  could heavily dampen it and use a trigger which are pretty affordable these days but you would need some sort of sound module. Playing with a lighter touch as well as striking the drum to the side of the head instead of dead center will also make a huge difference. All of these things will change the sound. Not always a bad thing depending on the situation.

Not technique related, but people who cannot adapt to variations in loud often have some variation of hearing loss. Most do not check this regularly, but is a prudent preventative measure (especially for loud musicians). Just a suggestion, and probably won't get received well, but something to consider.

Get a different drummer.

Or use a computer or a drum machine.

quantumeffect
 
I use bundle sticks (e.g., Pro Mark Hot Rods) 
They are twice the price of regular sticks and last half as long, but make a major difference in volume.

 
 
THIS.
 
simple concept, 
easy to use,
no excuse.

Hey Bitflipper,
 
I'm thinking stick control (power) and stick diameter are the big issues.  You could suggest a smaller diameter stick  and possibly some tone control rings from Remo.  Hot Rods are awesome and could work well too.  
 
Here's a vid from Sweetwater that could help though those drum shields at the end are pretty pricey and in my opinion, not so practical for gigging.
 
edit* ok, the youtube link was stripped.  Lookup "6 ways to overcome drum volume by sweetwater".  

Problem is drums don't sound so good when hit softer.  The attack and punch gets ugly and flimsy, but you still get all the shell ring.  Crashes and splashes don't sound right trying to be light and quiet.  The kit just sounds bizarre when you play like that.  And it totally ruins a drummer's feel and emotional connection to playing.  
 
Try playing your keyboard without hitting the keys so hard, try to make yourself play every note even quieter and lighter than you do when you're in the zone.  Pick your guitar strings, play the same songs, same riffs and solos..but do it softly, don't pluck so hard, and see how that translates.  Then do that all effin night.  
 
I would definitely suggest looking at stick size.  I'm wondering if he's playing with heavy sticks.  That could make a big difference going to a smaller diameter, lighter stick.  Is he playing with the felt or plastic side of the kick beater?  Cymbal striking technique is important, but I'm betting the issue is with the toms and snare.  One thing I did a couple years ago is completely abandon hitting hi-hats with the side of the sticks - keep it all at the tips and you get crisper action that cuts through with not near as much washy volume. 

Tell him to practice playing at lower volumes. I have known many a drummer who simply loses all of his feel for the kit when asked to play at a lower volume while others (who make it a point to practice at varying dynamics) who can retain the feel and some of the sound. It is difficult but not impossible. 
 
I have also used RTom Black Hole practice heads and Zildjian L80 practice cymbals for my drummer when in really tight spaces where volume is an extreme issue. They are not cheap and you have to tape some cymbal felts in between the pad and the drum head to get any tone out of the drums but the snare sounds like a snare and so on. It takes work and it's not prefect but it does work with time and effort. The practice cymbals sound like crap and will likely be too low in volume so it's a trade off. Lack of tone for less volume. If interested I would just buy a snare head and try it before investing in anything else. 

MBGanttTell him to practice playing at lower volumes. I have known many a drummer who simply loses all of his feel for the kit when asked to play at a lower volume while others (who make it a point to practice at varying dynamics) who can retain the feel and some of the sound. It is difficult but not impossible.

 
This is going to be tough if he is older and set in his ways, but it is all true and IMO it makes for a better all-round drummer. It is harder to pull a rich tone out of the instruments at lower volumes, requires more finesse, but it can be done.
 
Also what others have said about using 7A's and "Hot Rods."
 
I recently put on the cans to play drums along with one of my favorite records, Oasis' What's The Story, Morning Glory?, and was surprised to find that at least two of the songs, including the enormous hit "Wonderwall," were recorded using rutes/rods/bundle sticks.
 
The first time I tried playing with the damned things I sounded like someone hitting the bottom of a plastic wastepaper basket with a dead fish, but I kept at it, and discovered that they require their own techniques to get a decent sound. More of a whip, and strike the head with the side of the rute, not so much the tip. Swat the drums with them like you're after a mosquito.
 
You might have him notice that his playing is driving people to the back of the room. If he is interested in having the punters like what he does, it might influence his playing to go easy on them.