Mark
Your approach only gets at part of the problem as I see it. Once he has yelled this out, his players, the fans, the refs, AND the opponents have heard this. Your approach fixes him, but a T lets the opponents and everybody else know that you addressed the problem. If you don't do that, his impact on the game would continue through the intimidation that he has on the other team - he has directly threatened their safety on the court.

Coach,
So you know, he was not screaming this out. Only the people immediately surrounding him could hear (say 10 feet or so). So the other team may have never heard, and the refs would only hear when they were within that radius.
Ben

Good thing the parents of the other team didnt hear the coach! If it was my child playing and the refs made no attempt to control the situation who knows how far it would have gotten out of hand. I too also agree with the majority on this and toss the coach.

As I try to imagine myself at THIS game with THIS situation, I ask myself: "What specifically would I do and when?"

It sounds like he must have been saying these things during time-outs or during free throws--based on your description of how only those within a short distance heard him.

“He would say things like ‘next time you have one of their shooters close to you like that you have to take him out’”

That statement might get my attention, but be vague enough for me to question his meaning, but not necessarily take any action at that time. Enough though that I would probably be keeping my "antennas" (antenni ?) up for anything more like that coming from him.

"if you have one of their guys flying over you to get a rebound you had better undercut him"

That statement has definitely got my attention, and if I hear that, I'm taking the "warning" approach and talking to him--along the lines of Marks comments:

"'Coach, I heard what you just said to your players. I'm telling you that if one of your players even looks like he's thinking about intentionally injuring someone, not only will both of you be out of here, but this game will be forfeit. You may want to rethink your situation and talk with your players again.' Then turn around and walk away."

If I'm hearing this one: "if he is ever that close to you again swing your elbow and break his jaw". He's gone!

Above it all, I'm hoping the guy doesn't really mean exactly what he's saying. That we really don't have someone like that teaching our young people. But I'm old enough and seen enough and heard and read enough that I know everything is possible, and that we unfortunately do have these types out there. So maybe I am taking the harder stance.

Whether he meant it or not is irrelevant. If any one of those kids on his team takes that advice seriously, and we as officials don't act appropriately in this situation, we have only ourselves to blame. The coach is an authority figure for these kids. When we hear a coach clearly tell his players to injure the other team, that is way outside the bounds of "spirit of the game". If you let this behavior go unpunished, then the kids on his team get the message that we are condoning this behavior. This official was "lucky" enough to hear the coach say it. What happens the next game when nobody hears him say it and it happens? The kid will get thrown out, some other kid maybe ends up in the hospital, but the coach will go unpunished. The moment I hear a coach tell his kids to injure the other team purposely, he's gone. I send the message to those kids on his team that it is not going to be tolerated and it is not happening on my watch.

No! No! Those last comments are only musing in my mind. Wishes, hopes that someone wasn't really saying that and MEANING it. Like I said in the remainder of the paragraph, I know there are those out there like that. And as I concluded, my stance is one of erring on the side of conservatism and safety.