Hi D.,
I live in South Mississippi where Hurricane Katrina hit in 2005, so am familiar with the effects natural (and other) disasters have on children. My son was 8 in 2005 and, for him, once we returned to the area, it was very important for him to physically see his school, church, friends' homes, that were still standing. Once we covered what was still there, we then went to see what was not - my office building, his pre-school, our library, etc....more was gone than was standing. Since I work in non-profit we also quickly found places to volunteer to help with the relief effort.
Since you do not live in the affected area (praise God) - keep an open line of communication with your son about your friends that do live in that area. let him know that they are safe, let him know that the chance of this happening where you live is minimal, assure him that this event was no-one's fault - this was a result of our ever changing planet - heck, explain Teutonic plates to him, explain how the shifting of the plates caused the earthquake, and how the earthquake caused the tsunami. Maybe more information than he can take in - but I have found that childrens' fear is caused by the fear of the unknown - they do not understand that these types of disasters, while huge, are localized in nature. So carefully reassuring him that it will not happen to your city may go a long way in alleviating his worry.
You are right to turn off the TV, put in a CD and play music and dance with him and get your news from the internet where you can close the window when he wanders over to see what is on the computer screen. My son was 5 during 911 and I had to turn off the media in the house - the images were just to upsetting for him. He had a much harder time at 5 understanding that disaster then at 8 dealing with Katrina even though the human losses were slighter but destruction was literally down the street.
Is there is any way your son can talk to the "nice person" - your friend in Sendai? While I am sure she is extremely busy dealing with the relief effort - it may set your son's mind at ease to actually talk to her. I know in the days immediately following Katrina getting in touch with family and friends and finding out they were okay, was extremely helpful to my son.
Also, don't make this disaster a focal topic in your home around your son - hard to do, I know, but he is really young and simply will not understand much of it. Do keep yourself upbeat when, and if, he asks about it. Do give him positive updates....ah, heck D., just tell him the "big water" is gone and now everyone is just mopping up the mud. It really is not going to hurt to white lie it a little for his benefit.
As to the "egg water" - just chuckle and let that misnomer pass on by. They all do it and call things by the wrong name or their own version of names. The defiance is most likely completely separate from the disaster - unless you have been extremely distracted by the event and he is picking up on your concern - in which case, once you practice on not projecting your concern in front of him he should calm down. We often have to worry in private and project a "no problems" demeanor in front of our children.
Know that the entire country is in our prayers. If there is anything that we can do, please let us know.
Good Luck and God Bless