Having read all post, I can first and foremost conclude, we are all passionate about freedom to fly and privacy.
With regards to how to deal with a bad neighbor, this can be very difficult. A good neighbor wouldn't have called the police without some attempt of polite mediation. His first interaction with you was just to collect information in the form of your name and address so he could report you. That was really a no win situation for you. I know firsthand what that's like.
So what can you do. Simple, you can continue to fly and fight, or not fly there. You are the only one who may be confronted again by either the neighbor or the police. If you do decide to fly:
First, I would have no additional communication with the neighbor. It would likely just be counterproductive and may lead to a larger issue. If confronted, I would consider a response of, "Please stop harassing me, I have nothing to say to you".
Second, be polite with police. I'm sure that they would rather be fighting real crime, but respond they must. Ask them, what are you specifically accused of. If it's anything other than the act of flying a drone, i.e., laws on nuisance (an unlawful interference with the use and enjoyment of a persons land), you could have a real issue getting the responding police to side with you. Doesn't mean your wrong, people win in the courts all the time, but off to court you may go. I know, that just takes you right back to "you can continue to fly and flight or not fly there".
Third, I would be prepared to defend yourself. Politely but firmly, state the facts of the FAA regulations that permit you to operate. Chances are they don't know the regulations that cover drones, but you should. Within reason, print and have on hand the applicable sections. Printing is cheep, offer them a copy. Giving them this information may lead them to say to the next caller, "we have investigated this and the drone operator is operating within his rights".
Final thoughts are, If you read enough post on this forum, you will find as many members that say you can't do zzyzx as members that say you can. Do your own research. I would also note that many members expressed how they would dislike and even retaliate if a drone was hovering over their property. Strong statements from people who actually fly drones. Makes you think, if a drone pilot is so concerned about a drone over their personal property, are we really surprised when a none drone pilots is less than appreciative of it. For myself, I love to watch all aircraft, and if by chance I happen to see a drone in my neighborhood or over my home, I would enjoy the moment in it entirety!
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