I don't really have any advice since my child's imagination is good but really just contained to playing pretend...it's pretty easy to tell when she's in and when she's out, so to speak. Though she was always freaked out by those mascot type characters (real people dressed up) and visiting Santa and wouldn't go anywhere near the giant Easter Bunny.
But just wanted to say that your son sounds like a really fun guy and your description of his tales made me laugh. What a character. Writing his stories down seems like a really good idea.
