It sounds like a good time to redirect. I think you can still get punching dummies from the toy store (it's been a few years since I bought one.) They are usually blow up clowns with some sand or something heavy in the bottom. I would put that in the time out room and let him hit on that. Explain that it is okay to ease frustration on the doll, but not on people. Anytime he hits, separate him from the other kids (in another room) until he is ready to play nicely. Make sure the other kids are not provoking him by peeking in the room, intentionally pushing his buttons, etc. It will take some diligence on your part until the new behavior pattern is established, but it should allow him an outlet and a chance to learn some social rules.
Good luck!