Oh man, what crappy neighbors. They really should get that dogs barking undercontrol. How long has this been going on? Is it because the dog isn't used to being outside? IMO I would never leave my dogs loose unattended in a yard. A stressed dog will dig and destroy stuff. Do they give him enough toys outside to keep him occupied? I know it's not enough mental stimulation for the dog to be fully content without his owners playing with him...Hopefully that dog has the smarts enough not to try to come into your yard. I personally would run a hot wire along the bottom/middle of your fence. Just to protect your own rear end from their irresponsibility.