I will try to not be overly long.
I think for free he is OP (by OP i mean he is VERY good utility for the card/resource cost), for X-1 he is good and playable in any deck with 3 spheres that include leadership.
The card i would compare him to as the most similar is Errand-rider (HoN) and Envoy of Pelargir (HoN). They have similar cost, similar reason to be included (chump, resource smoothing). As written, Distant Relative is better then both of those cards, can we agree? Both of which, at least for me, see a lot of play.
Comparing to squire, which is a free blocker, Distant Relative not only is free, but get his resource back immediately, while squire takes at best one turn. Distant also give you more by resource smoothing, 1wp and being a better target for leader/gondor global buffs.
If X-1, he role would be: Pay 1 to get a chump blocker and/or a 1wp quester (which by itself is good), smooth 2 resources, play a 2 cost card of another sphere you couldn't before. Similar play as Errand, but if you play errand in 3 sphere, he don´t let you play a 2 cost leadership card, exhaust himself and dont have 1wp. Both costing one, i can see reason to play both in the same deck or different decks.
Your argument about being playable with 2 spheres is reasonable and I agree. Costing 2 is too much and he does too little. But the same can be said about most of the other unity cards.