26/20 Stratus or find him an old V2. I have a V3 and my girl is 5'4" and can ride it.

I think you're on the right track, Mark. I'll disagree with Jason and say a higher bottom bracket will work better. A Euro style seat with more recline is what works best for most of us with a bad lower back, and a higher bottom bracket goes with more recline. A Stratus or V2 is too upright for me. Even with my EZ Tandem, I can't recline the seat enough, so I don't attempt long rides on it. The slightly higher bottom bracket of my SXP let me recline that seat enough for my back, but I had to add a lumbar support cushion because of the seat pan bugging me, with the seat reclined further than it's intended to be. A new SXP with the sling mesh seat might work better, but that's a bit pricey for a first recumbent.  
 
Giros, Stradas, and Corsas can be fitted with Euromesh seats, and converted to 24" wheels, which work for shorter people, but something less expensive like the Actionbent may be more what he wants as a first recumbent. He should do some test riding, but needs to keep in mind that a short test ride isn't going to really tell him what his back will tolerate, unless he's never going to do any long riding than the test ride.

Mark, I agree with Greg--I like my V-Rex and can adjust the back of the seat to recline or bring it up if I want.  I'm 5'3" and have to tippy toe without leaning the recumbent on stops, but I have the thick seat bottom on this bike.  With the thin gel bottom, I didn't have any issues.  I like the bottom bracket height on the V-Rex better than I did on the Lightning Thunderbolt.  It just works better for me.

The Lightnings have a fairly upright seating posture, so it may not work for him... but that's what test riding is for!  To get significant recline, you've really got to have a bike with a higher (relative) bottom bracket pedal position -- The StratusXP seat's max recline is about 55 degrees -- anything less, and the seatpad interferes with the backs of your legs, and any "pushing" of the pedals slides you right up the seatback.  The more "laid back" seats like the Hoagie, M5, etc., are designed to support against the upper back better, for that push against the higher pedal position.
 
I'd suggest a steel V3 for him, but he might have ground reach problems.  Try a trike first...

Dianna - we switched out my wife's thick seat with the thin pad.  It feels weird at first but I've used it for long rides with no discomofrt, and it brough her at least an inch lower.  It's worth the money to switch out.  She is 5'3" as well.  (so she says anyway - She's a shawtie)
 
Listen to Bud about the higher BB - a higher BB is what allows for more seat recline in most bikes.  The lightning is a GREAT bike, but it's going to cause your friend pain - too much lower lumbar pressure.

Hey, Carolyn -- are you doing the Lancaster 40 on your trike???
 

[quote author=aikigreg link=1239255894/0#9 date=1239310376]Dianna - we switched out my wife's thick seat with the thin pad.  It feels weird at first but I've used it for long rides with no discomofrt, and it brough her at least an inch lower.  It's worth the money to switch out.  She is 5'3" as well.  (so she says anyway - She's a shawtie)  quote]
 
Greg, I have the thinner seat pad--just more comfortable for longer rides on the thicker one.  You're correct--I can touch the ground better with the thinner one, but the thicker pad is required for 50 or more miles.