Someone I know has a patterdale, weecoffeecup, and she's absolutely brilliant, no problems whatsoever - so there is hope.
Personally, I think 8 months is too old to be in a cage. Cages are OK for younger puppies. If he is OK at night with the older dog then he will probably be OK during the day as well. Does it have to be the living room? It's good that he has a companion and makes it less likely that he will be bored and hence destructive.
However, I wouldn't take any chances with the bird just yet. Can you move the birdcage to a different room whilst you are out? It would seem the easiest option.
I would have a practice run before Tuesday. Go out for a while every day if possible, staying away for longer each day.