Content theft - Where can I go from here?

Personally, I wouldn't worry too much about it. Just make sure the benefit of stopping them outweighs the time spent trying to do it. It can easily be a losing battle, even if you win. That said, there are a few options available to you.

• Find out if they are copying from your RSS feed or scraping your page. Add an user-friendly excerpts with links back to the original article and other articles on your site within your text. If they're scraping from RSS, just do that for the feed. You can also put your affiliate links, your products, your services, and your ads in the body text.
• Use .htaccess to prevent hotlinking of your images or to put your chosen image in place instead (think: this article was stolen from mysite.com or something to that effect).
• Try to isolate the IP address of their scraper and block it.
• Continue reporting to Google. Also, if they are serving AdSense or have any form of advertising on their site, report them to their advertiser and hit them where it hurts.
• Find their host and try to contact them about it.
• Get a lawyer.

Of the options above, pick the low-hanging fruit, the one-time things, first. A lawyer should be a last resort.

Two additional ideas.

If the posts are being automatically scraped from your site, consider including a standard footer within the body of your post - a footer that contains the name of your site, your site address, and a copyright notice. Then, your site ends up being promoted by the pirate.

Alternatively, if you can work out the IP address of the pirate, you could block it entirely, and stop them from browsing your blog.