Is he hungry? Maybe this is a "growth spurt" time, and at these developmental changes, they wake more, and get hungrier more AND more often.
(Sorry I misread his age :). I would not do the cry it out method. But that's just me. BUT... going in periodically and picking him up, then soothing him...then comforting him and laying back down is reasonable. Many times, their REM sleep gets interrupted too... so they are not yet "ready" to wake up per say, but need help in going back to sleep. And yes, this sleep interruption can make them cry as it throws them off.
There is also something called "night terrors" (it does not happen only at night). Here are a couple links on it:
http://www.babycenter.com/400_can-night-terrors-happen-to...
http://www.parentsleague.org/review_articles/ratner.html
http://www.kidshealth.org/parent/growth/sleep/terrors.html
http://www.babycenter.com/0_night-terrors_142.bc
BUT night terrors does not usually start until a baby/child is older. Just something to look out for. It is normal. Both my kids went through that from about 1 years old. I read somewhere that is can start at 9 months old.
Sometimes, if they are hungry and not getting enough intake, they are fussier.
Growth spurts occur about every 3 months, give or take. It does and CAN interfere with their "normal" sleep/nap abilities as they are changing so much. They can't help it, it's a natural progression and change for them. If this is what is wrong with him, it is a phase. It WILL pass. But in the meantime, KEEP to his usual sleep/nap times and routines. Then, when the phase passes, it should go back to normal.
You cannot spoil a baby. If he needs comfort and is distressed, comfort him. Babies "learn" by routine and repetition... whatever method you use. It takes time... so be patient.
It can also be teething, or gas, constipation... Sometimes colic does not even emerge until about now. There are various things that can occur making them act this way, and sometimes it can be several things going on at the same time. So keep that in mind too.
If he is crying like that, I personally would not leave him there endlessly to cry. (I know you're not) Basically, crying it out works because crying so much tires a baby out... and so then they pass out. Then they "learn" Mommy won't come and save them. So then they give up. But, being your baby is only 3 months, don't just leave him crying endlessly. They need to learn that they can "trust" Mommy and their needs will be met.
At least he sleeps through the night. But as a baby changes...through periodic growth spurts, this will cause a bump in their sleep habits. It will not only happen once in their lives... but many times throughout their growth/cognitive changes too. Head's up. LOL.
It is not always the Parent that is "creating" a "monster." Sometimes babies cry, and we don't know the reason. It's perfectly okay to pick him up, if he is crying or is distressed.
I think he is just going through growing "pains" and a growth spurt... developmentally and cognitively they change at these spurts. His intake also probably will increase and he may need to feed more often or more.
I know it's not easy... my boy is going through growth changes now too.. and he is fussier lately. But I know it is temporary. He also has some molars coming in, and he's been hungrier... so lots of things going on at the SAME time. It's not easy for a baby/child either... its a lot for them to adjust too.
Keep a journal and write about him... it'll be a great souvenir for later when he grows up. Babies change so much, so quickly, and one day, in a blink of an eye, they will no longer be babies. I've been keeping a journal for both my kids since the day they were born. It's so sentimental and fun.
All the best and good luck!
~Susan