IIRC, the XD series requires it's own sight pusher. If he used just any old sight pusher he had lying around, that will cause problems. My XD40SC shots just a hair low, but windage is good. If it were me, I'd see if could hunt down a smith with the right tool (assuming that was the problem). Failing that, the hammer & punch method. If you can figure out a way to get the sight really cold (shrink it a bit), that may help.
Also, have you tried different ammo brands/bullet weights? It may not make a lot of difference, but it might be worth a try. If nothing else, heavier bullets will typically shoot a bit higher. Windage? Well, you may get lucky.