So, Pain Split adds your Pokemon's remaining HP and the enemy's remaining HP together, and then divides it by 2. Here's Smogon's description:
http://www.smogon.com/dp/moves/pain_split
Basically, since Gengar will have 261 HP with a 31 IV in HP, and Chansey will have 704 HP with 252 EVs in HP (31 IV in HP as well), it takes those two, adds them together, then splits the sum evenly between each Pokemon. That means, Chansey will have 482 HP after Pain Split, Gengar will have full health; basically, Chansey loses 222 HP with Gengar at full health.
Take that a step further, and combine Pain Split with Substitute. 1 Substitute + Pain Split means Gengar is using Pain Split at 196 HP, and assume Chansey is at full health. Chansey loses 254 HP: (196 + 704)/2 = 900/2 = 450. 704-450 = 254.
No Substitutes (100% Gengar) - Chansey (at 100%) loses ~222 HP = Chansey down to ~68% HP
1 Substitute (75% Gengar) - Chansey (at 100%) loses ~255 HP = Chansey down to ~64% HP
2 Substitutes (50% Gengar) - Chansey (at 100%) loses ~287 HP = Chansey down to ~59% HP
3 Substitutes (25% Gengar) - Chansey (at 100%) loses ~320HP = Chansey down to ~55% HP
That is assuming a perfect scenario, where Gengar is always at 100%, 75%, 50%, or 25%. His HP can go even lower when he attacks with his Life Orb (-10%), so Pain Split is even more powerful, the closer his HP are to 0.
3 Substitutes + 1 Life Orb Attack (15% Gengar) - Chansey (at 100% HP) loses ~333 HP = Chansey down to ~52%
His Focus Blast with a Timid Nature also does between 30-36% to Chansey's HP, so if Chansey gets within that range, Focus Blast can finish her.
Also, keep in mind, a critical strike Focus Blast will also do 61%-72%. So, factor in Donphan's Stealth Rock, and you might have yourself a dead Chansey! After that, Latios will be free to sweep the other team, assuming they don't have another special wall.