If he's committed to the race, I think that's an excellent schedule, although it sounds extremely ambitious for a high-school 800-meter runner. I'd say that 5-6 hours a week in the pool, with much of it at high intensity, would be great. If his foot can tolerate it, an additional three hours of stationary cycling a week is useful for elevating heart rate (as you've correctly noted) and increasing leg turnover. Other cross-training equipment, like cross-country skiing machines and elliptical machines, would also be worth considering as a supplement to the water-running, which should be the staple of your cross-training program.
As for the big question -- run the race or not -- I wouldn't make any decision about that during the next four weeks. Just act as though you're going to run the race, even though you're not going to be running at all during those weeks. With two weeks to go, you (and your coach, teammates, physician, et al.) can start thinking about whether to give it a try. Personally, I have to admit that I would probably be tempted to give it a shot, although I might not recommend that anyone else do so. When I had a metatarsal stress fracture before the Olympic trials marathon, I decided to run the race, even though I had only run a couple of times in the previous eight weeks or so. I just felt that the sense of completion was important. I ended up dropping out within the first ten miles of the race, and definitely set back the healing process, but I didn't seem to do any permanent damage to the foot. But that was late in my running career, and the risk of a long layoff was acceptable to me. In your case, if you're planning to continue running competitively in college, a high-school state championship relay may not be worth the risk.