I am looking to solve:
Show that $$\sum_{n \ge 0} \sum_{k \ge 0} {n\choose k} {2k \choose k} y^k x^n = \frac{1}{\sqrt{(1-x)(1-x(1+4y))}}$$
and then use that to show that
$$\sum_{k \ge 0} {n \choose k} {2k \choose k} (-2)^{-k} = \begin{cases}{n \choose n/2}2^{-n}, & \text{if }n \ge 0\text{ is even} \\ 0, & \text{if }n \ge 0\text{ is odd}\end{cases}$$
Working the problem myself, I can pull out certain things but it doesn't lead me towards the correct answer.
For example, I know that $\sum_{k \ge 0} {a \choose k} x^k = (1+x)^a$, so I could potentially use that by pulling out $\sum_{k \ge 0} {n \choose k} y^k = (1+y)^n$, or alternatively by pulling out $\sum_{k \ge 0} {2k \choose k} y^k = (1+y)^{2k}$.
Similarly, I know that $\sum_{n \ge 0} x^n = (1-x)^{-1}$, so I could potentially pull that out as well.
However, with whatever combination of factors I pull out, I am left with something that looks far off from $\frac{1}{\sqrt{(1-x)(1-x(1+4y))}}$.
As for the second part, I am not sure if I am supposed to extract the coefficient of $x^n$. If I set $k=n$, I get $$[x^n]\sum_{k \ge 0} {n \choose k} {2k \choose k} (-2)^{-k} = {n \choose n} {2n \choose n} (-2)^{-n} = {2n \choose n}(-2)^{-n}.$$ This is the wrong binomial coefficient, combined with an extra negative sign by the $2$, and no indication of any need for $n$ being even or odd.
Any thoughts?
For the first part: To prove the identity $$\sum_{n\ge0}\sum_{k\ge0}{n\choose k}{2k\choose k}y^kx^n=\frac1{\sqrt{(1-x)(1-x(1+4y))}}\tag1 $$ you should try swapping the order of summation. After swapping, the inner sum over $n$ will be $$ \sum_{n\ge0}{n\choose k}x^n $$ which you can evaluate using the identity $$\sum_{n\ge k}{n\choose k}x^n=\frac{x^k}{(1-x)^{k+1}}.\tag2$$ (Remember that $n \choose k$ equals zero when $n<k$.) Having simplified the inner sum, you need to evaluate the outer sum over $k$. For this you will need the identity $$\sum\limits_{m=0}^{\infty}{2m \choose m}t^m=(1-4t)^{-1/2}\tag3$$ (note that your formula for $\sum_{k\ge0}{2k\choose k}y^k$ is incorrect).
For the second part: Yes, you are supposed to extract the coefficient of $x^n$. By choosing $y=-\frac12$ in the LHS of (1) you will obtain something that looks like the LHS of the identity you wish to prove: $$\sum_{k\ge0}{n\choose k}{2k\choose k}(-2)^{-k}= \begin{cases} {n\choose n/2}2^{-n}&\text{if $n\ge0$ is even}\\ 0&\text{if $n\ge0$ is odd} \end{cases}\tag4 $$ To get the RHS of (4), plug $y=-\frac12$ into the RHS of (1), and expand as a power series in $x$. To perform this expansion, identity (3) can be used again.