Re: Please advise whether we, as the parents, should be "celebrating" a grad event when he is not technically graduating.
Should you be celebrating? No. There's nothing to celebrate, unless you want to celebrate lack of credits.
Should you attend at least one grad event? Probably. Not to celebrate, but to show your son that you support his education and all that is associated with it.
Should he go in a limo with his friends and attend the banquet with his girlfriend? Absolutely. This may wet his appetite for finishing his education on a strong note.
Don't feel sorry for him, but do bear in mind that he may feel a bit inadequate during the events.