She definitely needs to address the problem better. It's terrible that she's a single parent to this boy now. Support is the biggest thing Special Needs parents need and who better to do that than your spouse? Someone who gets it. Parenting my boy is sometimes the hardest thing in the world to do! (On the flip side, I find him to also be the easiest kid to parent because, for him, everything is concrete. I don't have to figure out nuances of behavior with him like I do w/ my neuro-typical kids.)
It sounds like this woman needs some outside resources to help her son.
I still think you should call the police because you have ALREADY tried talking to her and have been blown off. Calling the police will maybe give her a wakeup call. It's not a huge issue -- the kid's music is too loud, she needs to have him turn it down, she won't, so let the cops do it.
She's using her son's diagnosis as an excuse. Autism is the REASON, it should never be the ESCUSE.
My boy screams and freaks out if I tell him we're leaving the house. Reason: Autism. Excuse? Not at all. I realize the autism makes him want to stay home, in his little, safe, coccoon. But in order to function in real life, sometimes you have to go outside your little comfort zone. So we go anyway. Letting him use it as an excuse would mean letting him stay home and, therefore, changing the whole family's day to suit him.
The neighbor is using autism as an excuse to let her son listen to his music at ridiculous levels and disrupt the neighbors. Not cool. She is doing him a disservice, and herself, because it's NOT going to make for good neighbor relations if she keeps it up.