MY son did the same thing. And he was the same way -- so sweet and then just totally changed after he started school. He was learning to be mean, and he hadn't been around that before. I cried for weeks because I thought I had lost him for good! That was two years ago, and he is back to himself. We talked to him (quite a few times) about the things we liked about him before, and any time we caught him being sweet, we would reinforce that. And also talked to him about the fact that, just because other kids do something doesn't make it ok. Some kids at school may think it's funny to (fill in the blank), but it's not nice, and when they get older, they will know that, too.
Also, my son is the oldest of six, but we kind of played on that, too, telling him that the other kids just haven't learned yet how to get along with other kids because they didn't all get a baby brother so quickly. They would probably be better at it after they had been in pre-K for awhile. That really seemed to help him.
Hang in there! I don't disagree with the woman who suggested homeschooling, btw! I am keeping that option in mind, as well.
M.