@mattmay Is anyone checking him, or are they just letting him run rampant?
Sometimes, it's better to make the environment such that the uncle cannot wait to get away from the party, rather than make the party feel uncomfortable with the uncle.
I understand polite company and all that, so maybe it's not the right time/place. I've got an uncle like that, though, and he just won't talk anymore if I'm in the room. I've checked him enough, in front of everyone (except grandpa... polite company and all) that he's just given up.
Family gatherings are far more tolerable in this state.