C.P.
I have seen too much Super Nanny not to respond.
Do the boys sleep in their cribs? If so, I would suggest not using them as time out spots.
Find a corner, rug scrap, or some place you can keep an eye on them. You tell them they are going to the "naughty spot" (Super Nanny's words) and tell them why. If they get up, you put them back. I have seen this take quite some time (like hours) on Super Nanny so be ready for the long hall the first few times. Once they have sat there for their allotted time (one minutes per year of age), you remind them why they went there, and insist on an appology. If they don't give it, the time starts again. They should also appologize to sister if that is why they are there.
This is the way Jo handles it. I have seen it work time and time again to get the kids to start acting right. Also, make certain your hubby is on board and punishing them the same way. Work on it together.
Give it a try and let us know how it goes please.