How can a subordinate deal with a difficult boss?

It's difficult at first but gets easier as time goes on.  The basic technique is to keep the boss busy on tasks of your choosing.  It's easier if the whole team coordinates their efforts.  

Difficult bosses usually have triggers - things that stir up their emotions and attract their attention.   Identify those triggers and control their activation.  You can then get the boss working hard on problems that don't exist, because you invented them.  This leaves you free to get on with the job.

For example, you have to create a report each week and the boss has to check it.  The boss always gives lots of corrections, usually several times.   This is going to happen whatever you do, so keep a record of the things that are corrected.  After a few weeks you will be able to create a correct version, but if you do the boss will invent lots of things wrong with it.  So don't give the correct version - insert lots of "mistakes" of the kind that she/he will enjoy correcting.