At this point, I'd let it go and let him figure it out. A little more time continuing the Santa charade isn't going to make him feel more lied-to, and he can come to grips with the truth on his own terms.
We dealt with it by me fessing up to the boy. It made my wife very angry, and it took a while for the furor to die down in the family (I was amazed that it was such a hot-button issue for them). I feel bad about telling him, since he's been kind of mopey about it just recently (I guess kids at school are excited already), but at the time I just didn't want to lie to him. My wife is pushing hard to encourage our one-year-old to believe as long as possible, and I don't know what to do. I think that if we keep up the act for DS1's sake, DS5 will probably get some vicarious enjoyment out of it, which is one good thing.
