Thank you, thank you, thank you mammas for all your replies and opinions.
I have decided that I want no more contact - at all - between FIL and my two sons. I am not going to justify it to anyone, (other than DH). FIL is not a nice man, my DH hated him until very recently. His brother doesn't speak to FIL b/c he was there when FIL hit MIL, stopped it, etc. (years ago). He drinks, (more than normal) he swears, he is loud and obnoxious, rude, has hit both his wife and children, and basically had nothing to do with anyone (any of the family) until my son turned 2 and now he suddenly wants to be part of our "big happy family", come to our house, come out to restaurants with us, have us over, etc. etc. saying he wants to see my son. For the first 6 years of my marriage, he had nothing to do with us, as far as I'm concerned it can go back to that.
I think I will not accuse FIL of being a child molester or voice those specific concerns at this point, I think I will say to MIL that I am not comfortable with the relationship FIL is trying to build with DS, that he is not someone I want my DS getting close to or having as a role model, and that we will not see her when he is around. She will get grief from him, and she will in turn give me and DH grief, but that's her problem. As I said, that was life before my son turned 2 so it shouldn't be a big adjustment. DH hated his father until his very recent attempts to now see us all the time, so I will be surprised if DH is resistant to this approach - biggest issue is that he can't stand up to his mom, who will pressure us / him hard as she will get pressure from FIL.
I have thought about the possibility of FIL just paying extra attention to DS because of their nationality, etc. He pretty much hates women. There is one other nephew, who got lots of attention between ages 2-3 as well, but it cut off suddenly - no idea why. Now FIL pretty much ignores him like he does the rest of the granddaughters. I've talked briefly to SIL, this is the family who now has nothing to do with MIL/FIL. She said she didn't suspect anything funny with her DS and FIL, (but honestly she is not that with it). Also, FIL does not even acknowledge or show any interest in my 7 week old boy. If he just "loved" his boy grandchildren, then my 5 yo nephew and my new DS would also get at least a "hello" and "goodbye". They don't exist, like the rest of the g/c to FIL.
The thing that gets me in the gut is that it's just not his personality. He has never once in his life bought any of his own children a gift - bday, xmas, etc. He is not even around for those occasions. He does not hug, kiss or play with anyone. He pretty much was a man who lived in the same house as MIL up until last year, when he suddenly started paying attention to my DS and asking to get together with us all the time. In the last 6 months, he has:
- brought DS silver bracelets, shirts, etc. (and tries to get DS to take his shirt off so FIL can put the new shirt on). These were gifts from when he travels, he does not bring any of the other grandkids gifts, boy or girls.
- played horsey - getting DS to ride on his back (I saw on Oprah that this gets some pedophiles off b/c they feel the child's genitals on their back :Puke )
- always asks DS to sit on his lap, give him hugs, give him kisses, kissed DS on the cheek and head, says he'll cry if DS doesn't kiss him.
- asked to see DS belly button, touched it, asked DS to touch his, (this I walked up on in the living room and immediately put a stop to. MIL and DH were sitting right there. DH says he didn't notice.
- he plays ball, does puzzles, etc. with DS. (DH and even MIL said they've never seen him play with a child in his life)
- put his arm around him while doing the puzzles, rub DS's back.
- asks DS to stay over, (DS has never slept away from home)
- asks DS to go for walks after dinner, but has no interest in any other grandchildren walking with him
- suddenly always comes for visits, spends most of the visit with DS,
- makes a point of driving MIL to see us or for outings that he has refused to be part of for the last 6 years
- asks MIL to phone us to get us to bring DS for a visit
- if DS won't hug him/sit on his lap, he grabs him and pulls him over (I HATE people who do this).
He does not show any kind of attention or affection to his own children, his wife, etc. It is just not his personality. He has always been absent, disinterested, now suddenly it's all about DS. I don't want any contact b/c as pp mentioned - I don't want to give DS a false sense that the affection is ok if he does it when we are around. I also don't know what is going on when he's on his lap. I also don't know that I can be in the same room every second, (trying to also care for our newborn). I also don't know that DH will pay enough attention when he's there if I'm not watching. I also don't want the stress and fear that something will happen if I let my guard down for a second or look away. It is easier to say no contact at all.
I feel sick b/c I recall a time before I noticed anything "funny" that DH took DS to FIL/MIL house, and we had agreed that DS would not go on walks with FIL because he's not responsible enough, but later DH told me DS had gone on a walk with MIL and FIL together. There was also a time around then that DS would not let us touch his bum, (i.e. to put diaper cream on) and he said it hurt every time he pooped. I honestly can't remember if the timing was related but they were both in the last 6 months. It makes me wonder if something happened. I don't trust MIL to be honest. I think she is scared of FIL and will do what he asks. It made me sick this past weekend when she called to say FIL asked her to call so DS could see his "favorite grandfather". DS has two other grandpas that he loves and sees waaaaaay more. It was like MIL was doing FIL's dirty work. FIL didn't even acknowledge DS existed until 6 months ago when the above suddenly started full force. It is just so out of character and so obviously directed at just DS, and it is way to physical IMO.
I really appreciate the support everyone. I feel good about my decision. Thank you for all the feedback and suggestions. It has made me realize I really do think there is a risk, and it is not a risk I am willing to take, and that I shouldn't care about ticking anyone off, my first priority is to protect my children!
Sometimes just "talking" about it makes it click, you know?