How about you tell him you're more than happy to do it his way - and then hand him the list of lights & modifiers you'll need in order to get the set's he's chosen lit & balanced within 7-8 stops so that everything looks good when recording straight to a REC709 ready LUT.
Once he balks at the rental costs, you can suggest doing it your way instead! :grin:
Otherwise, just shoot it his way as best as you can (like Rob said, treat it as a challenge), and if anything goes wrong just wash your hands of the mistakes and tell him you warned him!
Haha! Well the fortunate thing is I have a ton of my own equipment. I own 2 Aputure 120D and a 300D, to small LED Bi color panels and Lowell Pro Light kit. So I will just treat this as a challenge. I totally agree with trying to capture the look in camera as much as possible but when it comes to exposure and post grading I feel the its best to expose brighter and get the most latitude in post regardless of what the intended look is.
The idea of not wanting to do post coloring/grading on a project that is a personal short and has no time crunch simply because you want to be old school and get everything in camera is so silly to me. He is a great friend but sometimes I feel he can be very dense to the fact that just because you were taught one way in a school 6 years ago does not mean it applies to everything. In the end it is all subjective and not method is right or wrong per say so to each there own, I will just work the way he wants and we will see what happens.
I will probably still record RAW and just record the proxies onto a SD card and monitor via a LUT that he will have to apply in post. That way he still can throw a simple lut on the .mp4s and have his look with no extra work but has the RAW files in case he realizes he needs extra latitude with the files.