E.,
At this point, I would recommend you consult a licensed child therapist (psychologist or social worker) to have your son evaluated. As a former social worker who worked with many kids with sexually inappropriate behaviors, I think you have waited and watched, hoping this behavior would go away, long enough. From your profile, it looks like you are in Bureau County. Here are a few resources nearby that may help connect you with a qualified child therapist for an evaluation for your little boy:
Bureau County United Way, Inc., 401 South Main Street, Princeton, IL 61356, ###-###-####
St. Margaret's Hospital, 600 East First Street, Spring Valley, IL 61362, ###-###-####
Catholic Charities, 542 Crosat Street, La Salle, IL 61301, ###-###-#### or 800-852-4294
If these don't work out, try calling local hospitals and asking for their department of psychiatry/mental health, or consult the yellow pages and look under the headings "Counseling," "Psychologists", "Child Therapy" etc. Your health insurance may be a source of referrals for an evaluation, too.
All the best to you,
V.