Re: Should I stay?
Rather than going for a black/white stay or go, take a break from training for a couple of weeks. Look around at what else is available dojo-wise in the area and at the end of your break ask yourself whether you want to go back and give it another go or whether you've enjoyed the time off and want to train but not there.
Currently, you sound too close to the initial situation and can't step back to make an objective judgment for yourself - especially as people you feel close to are also working through what sounds like their own resentment at the usurper.
However, key thing is it's your training that should matter and you should only consider training there if you think you can learn - it helps if you can like the instructor, but it's not a crucial requirement. It doesn't work if you really can't abide the instructor, been there, tried that, still have his picture on my dart board...