Dear K.,
I just don't know what to tell you, but I will encourage you to take hold of this situation now. He needs to do a lot of crying to get this out of his system and to start to realize that he cannot do all of this. Telling him is not really the best way to accomplish his taming. He has to feel the pain of being isolated because of his behavior. You and your family are going to have to just endure a lot of crying and screaming from him - so don't start griping about that.
You can go online at www.drgreene.com, to find some ideas - you can also begin a very simple procedure that will get this problem starting to be stopped.
Read some about 3 year olds and their points of view too, that will help you get into his mind.
Soooo, the next time that you see or hear him being rude you pick him up, carry him to his room, and say that you are not going to be rude anymore, and you have to stay right here until I tell you that you can come out and play again. Scream, cry, and tears and snotty nose later, wash his face with a cool cloth, blow his nose, give him a drink of water, to the bathroom if you can, and then to a normal routine and no talking about how bad his was. THEN be prepared to do the very same routine again and again, never relenting, and never fussing at him. Just tell him he was rude and he can't act that way.
I had to be in a room with a little three year old that was doing the same thing - I did the same thing that I told you to do, but because we were in a school setting, I could not leave him in the room alone, so I had to endure it allllll. You may have to stay in the room to keep him there, I would not leave him alone with the door closed. So you might have to stay there the first or second time - just to keep him safe and in the room. Don't try to talk him out of crying, you don't need to talk at all. He will do plenty of screaming, if he want to sit on your lap for some love - that is great, go along with the love but do not give in, he has to realize that you are in control of him, and he cannot leave the room until you decide.
O.K., that is all I have to say, except that it worked wonders for the little boy that I helped through his hard times with the world. He wanted to come home to be my little boy.
C. N.