J.M.
I had the exact same problem with my son at the exact same age. I tried EVERYTHING to get him to stop. I even, shamefully enough, resorted to hitting back. That didn't even work. This went on for a couple months until I relized that his daycare provider allowed him to be overly aggressive with the other children. She had had him for so long she became her "favorite" and she automatically sided with him over any other child.
The end result was that I transfered daycares. I ended up picking a daycare where the provider herself had a young child the same age who she had the same problem with. They honestly duked it out for about 3 weeks to see who would dominate but then just stopped and are now inseperable when they are together.
If you are doing time out and always following through, then I would suggest you give a very close look to the daycare enviroment to see if he is being "spoiled" by any of the women there.