My heart is breaking reading your post. Have you spoken to the teacher to see if there is anything she can do to help settle him in? Also why don't you try to organise some playdates with some of the other little boys to see if this can help him make friends. I find this can be really effective for children to make friends outside the school environment if they are having difficulties. He could be a lot keener to go if he has a friend. Could you try getting someone else to drop him off? This might be worth a try.
Failing all that, maybe you should consider going somewhere else, if he is shy maybe a smaller group or school would make him feel more secure. I have been to both small and large school and found the small school suited my personality better and I thrived in that environment. It may also be the teaching style or the group dynamic that your son is reacting to. I would treat this as a last resort but it may be worth considering to get your son happy again. Good luck and give us an update.