Definitely time to lose the swaddle. In fact, my sister's pediatrician told her that she was endangering her daughter's life by continuuing to swaddle and like you, she swaddled for a very long time probably longer than you.
I think she did a 'modified' swaddle at first. She wrapped just from the torso down, leaving her daughter's arms free and gradually, as her baby became more mobile she loosened. Her baby is 14 months now. I will ask where they are with this.
Good luck. I have had three babies and two of them have had their own 'sleep' issues. Certainly not fun. I think the best advice I can give you is to do what 'feels' right for you and your child. You are going to get a lot of opinions about what is the 'right' way to get through the night but I have found that each baby is different and what works for one will not necessarily work for the other. My first ended up co-sleeping with us because every time I put him in his crib,he cried. He slept with us for two years and then when he did not like the new sheets I bought one day, he decided to sleep in his own bed.
My second was always a good sleeper in the crib.
My third, nothing worked for a very long time. Out of pure desperation, I did let her cry only after I knew that picking her up wasn't going to make her any happier. She cried in my arms, refused to nurse, wouldn't lie next to me in bed, did not want to be rocked to sleep by either my husband or myself, etc....
She is now fourteen months and just in the last three months has become a good sleeper. I can put her in her crib awake but noticably tired and she will most of the time turn over and sleep. She rarely sleeps through the whole night though and wakes around four wanting to be snuggled in my bed. Then she sleeps until around 6:30. But this is so much better than before that I now consider her a good sleeper.
So, good luck, you will find your way through this. I think setting a nighttime routine is really important (reading a book, giving a bath, etc...) to start cueing him, especially when he gets older, that it is bedtime.