I feel for you. We recently had a bullying situation with our 10 year old daughter and it was very hard to deal with - made worse by the fact that this girl had been one of my daughter's close friends - and her parents good friends of ours. Although what she did was not as violent as you are describing, her behavior was still very disturbing. When we tried to discuss it with her parents, they laughed it off and chose to believe that our daughter was lying. Even when I explained that I had witnessed the behaviour on several occassions and that I was concerned for their daughter's sake, they chose to ignore it. Twice since then they have asked us to get together and we have declined - they know why but just won't deal with it. They keep referring to their daughter as a "little angel" who would never do what we described (and one of the parents is a psychiatrist!) Sometimes I feel sad about losing the friendship - but, on the other hand, what kind of friends were they really?
I agree with speaking with the parents - even if you decide not to let your son play with them anymore - these parents need to know how their children were behaving. Hopefully, they will not take the route that our friends did, and will really take it seriously. I hope that it does not start a tense relationship with your neighbors but you just can't help that. We have to protect our children and teach them that this is totally inappropriate behavour.
I have seen kids bullying other kids as young as 3 years old and it frightens me about the future of our world. When I was a kid, just the thought of having to face my parents if I treated another child badly, was enough to stop me in my tracks - plus it just would have never entered my head. I don't know where all this violence and anger is coming from in our kids and youth, but I think we, as parents, better start really paying attention to it and start spending time and listening to them.
You could, as one responder suggested, try speaking with the 2 boys directly, but in my experience, there is a good chance they'll go along with everything you say, and then promptly do what they want to. I hate to say it, but kids don't seem to respect adults much anymore - which is probably part of the whole problem.
You can see this has touched a nerve with me and I truly hope
for you and your son that whatever you decide to do, it works out well. Good luck!