I completely agree with the white noise suggestion. We've used a fan of some sort with our kids since they were babies.
You may also watch what he's eating at night and how close to bedtime. If he's still digesting when he is laying down and starting to dose off, he may be having intense images or thoughts in his head which are scaring him.
I also agree that punishing him for being afraid is not going to work. I completely understand how frustrating it is if you suspect he's being overly dramatic for attention and you don't want him to wake up, or work up, the other kids. But, if he's truly afraid, you want to ask yourself what you're telling him if your response is to shut him in the room that is scaring him.
Have you considered arranging things so that he can have his own space again? Even if it means sleeping on a couch in the living room or office or somewhere away from the other kids. You wrote, "Now that baby sleeps in his room, he sleeps in his sisters room." It sounds like he doesn't have a room that is his at all anymore. I have an 11 year old step son who isn't with us as frequently as your step son is, and he currently sleeps in the top bunk with my 5 year old in the bottom bunk. I am already planning on putting a bed in the office so that he will have his own space.
My sister had two kids with her first husband, they divorced and she remarried and had two more kids with the new husband. My nephew spent summers and one weekend a month with his dad and the rest of the time with my sister. He told me once that he never really felt like he belonged either place and always felt like a visitor in both homes. I think this is a common feeling among older kids who split their time between homes. This may be part of the reason he's acting this way.
I would keep trying to keep communication open with him. Pretty soon he's going to be a teenager and then you're going to have other behaviors to worry about. :)
Good luck.
