Strategies for facing an "impossible" required course for PhD
Your description of your PhD program makes it sound quite unhealthy.  There is a required course that students can only pass by cheating, the faculty have been apprised of this and that "only makes it worse"?  Yikes. If the students don't care about academic integrity and the faculty don't care about the students, then things are dysfunctional to say the least.

It is not reasonable for one required course in a PhD program to take 40 hours a week of a student's time: that's a full work week.  Spending that much time in the course in order to pass it doesn't make sense to me: something else will suffer in your program.  (By the way, you say you also have a full time job, so that's another 40 hours a week.  So you are spending 16 hours a day, Monday through Friday, on your job and this one class, and then whatever else you have to do for your PhD program gets done on the weekend? That's not being a hard worker.  That is dangerously little down time.  Putting yourself in that situation is a very poor investment for your own health, sanity and success.)  To say that you can only pass the course by doing this much work sounds to me like saying you can't pass the course and that you must seek out another option.  If you're not doing that because of "machismo": please be aware that that doesn't actually make any sense.  Neither does a "refusal to fail": what you currently have is a plan that is very likely to lead to failure.  Get a better plan.

I am very concerned that -- apparently, anyway -- everyone else is succeeding in the course by cheating.  That's not acceptable.  You say that it wouldn't help to point this out to the professor.  Unless you have already personally contacted this professor about this issue, I don't see how you could know that.  In my experience, the way that skullduggery like this gets perpetrated is because the people involved think they have "no choice".  Of course you have a choice.  I strongly recommend that you tell everything you've told us to the course instructor.  Yes, there is the possibility that this could "make things worse".  It could even jeopardize your future in the program.  However, your future in your program is by no means secure at the moment, and if all your negative fears come to pass it does not sound like the program is worth your time.  

If you approach the faculty with the attitude that the program has to be functional and ethical for you to stay in it, I find it very likely that they will work with you and help you through it.  If they don't, then I think you're better off out of it.  I realize that's a hard answer, but it's what I feel is the correct one.