At one point he told the students that another student in another class was contesting a grade and that it was being currently discussed with the Dean. The discussion thereafter revolved around how stupid and egotistical this student was.
...
Near the end of class he discussed his concerns about the students "ganging up on" him and effecting his job for the worse.

Unlike other people, I'd say that these are definitely things that should be mentioned to the department head. Bringing up personal conflicts like that during class: doubleplusungood, especially ones that, like these, could be a way of intimidating (first one) or guilt-tripping (second one) students out of confronting him about their issues with his class.