Just out of curiosity. What happens to the kid who steals his toys all the time. I TOTALLY agree that your son should have a stern no and time out. but it isn't exactly fair if he is the ONLY on in time out. After the other little boy is done crying and being comforted and the wound tended to, I think he should also get a stern no and time out for stealing toys.
I'd get pretty damn frustrated too if I couldn't ever play in peace