I have an almost 2 yo dcb who is somewhat similar. He is very sensitive compared to the others. If another child is "in trouble" or if I even raise my voice at all, he cries!! Like your dcg, he cries louder and longer than the child who is in timeout or being spoken too lol. I have always just dealt with the other child and than I turn to him and say, "you are fine. You are not in trouble. You need to stop crying". He's been here since last June and I definitely have seen improvement!!! He will now sometimes whimper or start to cry but I usually just have to give him "the look" and he stops haha. He still cries when he is the one in trouble but even that has decreased and is not a full on cry anymore, just a pouty face and a few tears. I don't think he is overly babied at home but is an only child so a few things they have said happens at home does surprise me as he's not like that at dc (for example, at home nap is a disaster but here he is sleeping before I even get upstairs...he drinks from a bottle in the morning still but not here at all) He is a very sweet, gentle child but that also means that the other kids step all over him!! I am always encouraging him to tell the others "no" if they take his toy or push him around. He's getting better!