Rick
Honorable Pirate
We've had to kick many drama kings. If it's officers that are giving you trouble, the GM should demote them to veteran so if they continue to be a problem, you can kick them if you need to. You never want to lose guildies but it's much better to get rid of trouble makers fast. If not, a lot of good may people leave that won't put up with the drama in guild chat.
I learned that lesson the hard way - lost a few really good people thanks to one drama pirate who I gave a second chance. As much as I hate booting people from my guild - I gotta agree with Esmerelda on this - do it promptly.
We have a policy in my guild that the Officers vote on promotion to Officer, and for when we need to boot someone from the guild. I feel that this really empowers the Officers and helps them to enforce our guild's guidelines (we don't use a Co-GM title, the Officers are our "Co-GMs").
One way I've found helps with incessant guild chat is to get the people causing the drama to use crew chat (not whispers) - it keeps the whole guild from hearing them, and often they begin to notice that they aren't invited on material runs or looting parties - so they either shape up, or leave the guild on their own.
We (Officers & I) recently had to deal with that when a couple split up very vocally on guild chat - moving them to argue in crew chat saved everyone from reading their bickering, and actually caused them to have better quality discussions because they weren't airing each others' dirty laundry quite so publicly.