If you can check out a copy, the book Transforming the Difficult Child: The Nurtured Heart Approach has some really insightful things into it. Even if you don't want to apply the whole program (I'm not sure how far I want to go), the first few chapters are excellent. It's a discipline method that has something to offer all kids, I think.
Also, we get this, too, and it does really bother me. The things I've learned (but sometimes forget), is that a child who is experimenting with this sort of behavior is likely to let it go. When I feel like "OMG, I can't let this happen" when I can't really stop my 3 y.o. from doing some things my 6 y.o. does, that freaking out feeling doesn't help me deal well
One that is a challenge is when DD imitates DS's loud vocal tics, because 1) since it's kind of like sneezing (sometimes you can stop it, sometimes you can't, and if you do stop it you will usually want to do it again very soon), we don't tell him to stop since he often can't and being told to stop usually makes tic urges stronger and 2) if DD imitates the tic, it prompts DS to do it more, so it gets very loud plus sometimes puts DS over the edge frustration wise.
I think that your younger also learns a lot from how you respond to your older's behaviors. I think it's really important to be both firm and low-key, but it's hard to do that. With hitting or yelling to get my attention or get me to do something, my approach is to insist gently that they rephrase, "I don't feel good about doing something for someone who hits me. Ask me again in a nice way." That way they at least practice polite asking rather than only doing the hitting.