Let's say you have a hole where the green is fronted by a large man made pond on the left side. The cart path goes up the left side of the fairway to the water, around the edge of the water, and up the left side of the green. The green on the left is raised so that there are wood planks/railroad ties supporting the green next to the cart path. Red stakes line the water. A buddy hits a tee shot left that clips a tree so he is directly behind the water about 180 from the green. From his vantage point he sees in a straight line, a little fairway, cart path, red stakes, 50 or so yards of water, red stakes, cart path, railroad ties, green. He hits a shot that crosses the water, goes over the far red stakes, hits the railroad ties and bounces back into the water.

I told him the rule is he has to drop behind the water in a straight line keeping the point he crossed the first red stake boundary between him and the hole, or he could hit another shot from the same spot. He wanted to take a drop on the cart path by the green since he crossed the hazard, hit the railroad ties, then went back in the water. And then after dropping on the path, take relief from the path to the left no closer to the hole and have a roughly 30 yard pitch shot. I told him that one, it's questionable whether you really crossed the margin of the hazard because he never landed on any ground, he hit a railroad tie and bounced back which is just the way the ball bounces, rub of the green. No different if it had bounced off a ball washer or sprinkler head, or ...you just play it where it ends up. Also, I told him that I don't think you can take a drop from a hazard onto a cart path.

I know the rule on dropping from a hazard. But what is considered clearing the margin of the hazard and getting a drop on the other side? Was he entitled just by hitting the railroad tie? Also, what is the rule regarding dropping onto a cart path? I know if you are in casual water, you can take a drop onto a cart path if that is the nearest point of relief, then drop from the cart path to get relief from that obstruction, but what about a water hazard?

I don't claim to know all the rules in golf and it's apparent that the ball had crossed the hazrads by hitting the railroad tie.
So the last point of entry to the hazrads is on the otherside backwards from the green, now, where is the nearest point of releave is in questin here and I assume you need to determine the nearest point of releave and mark that and proceed with finding a place to redrop or replace the ball if necessary.

I think I understand your question clearly. Here's my take....

The railroad tie that he hit is either in the hazard or it's not. If it's in the hazard, he didn't clear the margin of the hazard and his point of entry is back in front of where he played the shot from. If it's not in the hazard, then he did clear the hazard and he's entitled to a standard lateral drop from the point of entry on that side.

"He hits a shot that crosses the water, goes over the far red stakes, hits the railroad ties and bounces back into the water." From that description, the railroad ties are not inside the hazard.

His drop options are from where the ball LAST crossed the margin of the hazard, which would be AFTER it hit the railroad tie.

Your friend is right.........

ANd in reference to dropping on the path. Again your friend is correct. He is utilising knowledge of the rules to good effect. If the path is the nearest point, fine. He must drop on the path. Now, if the ball comes to rest on the path, then he is now entilted to relief from the path.

If I am understanding you correctly, ball hit the railroad tie and bounced back into the hazard. If by this you mean the ball past the red line, hit the railroad tie and kicked back into the hazard crossing the red line, your friend has 5 options.
1. Play shot over from where he last played or as close as possible, he doesn't have to drop it in the divot.
2. Play it as it lies. If there is deep water, probably not a resonable option, but we have to throw it out there.
3. Keep the point it last crossed the hazard and the hole in a line and go back as far as he wants to on that line and drop the ball.
4. Drop within 2 club lengths (any club in the bag) of the point the ball last crossed the red line.
5. Drop within 2 club lengths of a point equadistance away from the hole on the opposite side of the hazard, no closer to the hole.

Unless there are local rules in effect, these are the 5 options. As I said with #2, probably not a good option, but a good rules official would give you these 5 options and let you make your own educated decision on what to do.