Try NOT reacting at all. Remove yourself, or him, from the situation. Not sure why you think he's too young for a time out, other than the fact that you don't want to give him attention by sitting there and holding him in the time out chair.
I disagree with pulling his hair to show him it hurts - at this age, they don't have the developmental maturity to transfer their feelings to someone else. All he will know is that you chose to hurt HIM. Aside from giving him negative attention (which is better than no attention at all, in his eyes), you will confuse him. When another child hits him, do you really want him to respond by hitting the other child back, or do you want him to walk away? Even people who want their kid to fight back find out that, when the kid goes to pre-school or kindergarten, that's not allowed, and the kid winds up being confused about appropriate behavior. Every school and every teacher will tell him to walk away, or come get an adult. This is the problem with spanking too - it teaches kids that hitting is okay, at least if you're bigger.
I also think that's why he doesn't understand or care when you cry - he's just not there developmentally at this age.
I don't see why you can't isolate your son - just pick him up (not in a comforting way, just a methodical way, like under the arms with no cuddling) and deposit him in his room. Put a child-proof doorknob cover on his side of the door if you have to, or a playpen. Some people use the crib but others think that makes the kids resent the crib and not want to go to sleep.
Whatever you choose: Do not engage him. What he's doing is not acceptable. You have to be consistent. Your goal is to get him to stop the behavior. It doesn't really matter whether he understands WHY it's not acceptable. Think of this behavior like grabbing the hot stove or running into the street. Would you allow it? Of course not - you would stop it whether or not he understood it. If you have a phrase that you use for situations like those, indicating that a behavior is non-negotiable, use the same words for hair pulling.
It's a shame that you've already cut your hair to prevent this - I'd like to see you be able to take care of yourself and enjoy your hair!
Good luck!