I think it was a hoax all the way, but I doubt they'll ever be able to prove it. Here's the considerations...
1. He recently submitted a proposal to someone (TLC?) for a reality show, and was turned down.
2. They were videotaping when the balloon lifted off, and the balloon doesn't appear to be "loaded", ie. nothing appears to be in the box on the bottom. The adult appears to be in the video too.
3. The guy is "experienced" in doing stuff like storm chasing, and he should have darn well known that the balloon probably couldn't lift a 30+ lb child and fly off like it did.
As for the sibling's story that he saw the boy crawl into the box before it was released, it has been proven over and over that an adult can quite easily create a reality for a child by simply making assertions. The child's mind fills in the gaps until the asserted events "feel" like real memories. Even adults can be convinced to "remember" things that never happened.
My bet - even if it wasn't planned as a set-up from the beginning, once the thing lifted off the father played it for all it was worth. The balloon doesn't appear to have that much lifting capability and the thing did not appear to be loaded down with any weight at all in the video clip I saw. The father let the drama unfold until they found the kid, and even "experts" had to assume the worst because by the time any third-party had cameras on the balloon, the empty state of the balloon wouldn't mean anything because the kid could have fallen out earlier.
So I say hoax, with it being nearly impossible to prove and with a big question of when it switched to being a hoax. It could have been a setup from the beginning, or the Dad could have simply let events unfold even as he knew there was no way the kid could have been inside when it lifted off.
