I think that you need to help this little guy. By continuing on with this he is going to have nothing but food issues later on. He is young enough that after a few days he will give in and realize he needs to eat what he is being offered or he goes hungry.

Talk to mom, say you understand that there has been a huge loss in their family and that she is doing the best that she can but you have concerns about him fitting in your daycare. You simply cannot accomodate this Cheerios diet as its impacting the other kids which if it hasnt yet, it will.

You mentioned the other screaming issues similar to what I had. That is another issue as well which has to do with fitting in a group setting.