Normal sexual behavior?

My sister just caugt my 4 year old son and my 7 year old nephew locked in her bathroom.  She asked the 7 yr old what they were doing and he said they were playing with water.  However, she didn't see any water around the sink or floor.  She looked at my 4 year old and he looked scared.  She then asked him calmly what had happened, and he kept looking at his 7 yr old cousin who then said they were just playing with water.  My sister told him she wanted to hear from my 4 yr old son what had happened...he then said that they were making each other's private parts touch.  She then excused my 4 yr old and talked with the 7 yr old.  

My husband and I always talk to our kids about who they should show their private parts to, and this is my nephew's 2nd time.  The first time he was 6 yrs old and was caught locked in the bathroom with my 4 1/2 yr old daughter.  We thought then it was just curiosity, but now that he's almost 8 years old, we feel it's becoming a problem.  Is this normal sexual behavior on my nephew's part?  We're also concerned that he lies about it.

We look forward to your response.

Thanks!

[musicmama]

It sounds like that child has been exposed to sex in a very unhealthy way.  I would want to keep my children away from this child until healing takes place.  If he has been abused in some way, it needs to come out.  A good Child Psychologist can get to the bottom of this.  

[hntrsmm]

This just happened to my 4 yr old son and a 7 yr old girl, the difference is my son was the one who suggested all of it. I dont know what to do. But a cps agent told me that playing with privates between siblings or children of similar age is completely normal and is not necessarily a result of sexual abuse. The behaviors involving oral contact on the other hand is not normal (just felt I should mention that).  That is what the social worker told me.

[Toshiro_Rin]

(PLEASE READ)
http://www.medhelp.org/posts/show/658586

[Toshiro_Rin]

If your son decides to perform these actions again and the child’s parents decide to take legal action then your child may be taken or placed into a detention center. You’ll need to make sure he doesn’t close any doors anymore when others are over. Make sure that he’s always in view when other children are over your house. This may be already happening elsewhere without your knowledge. Monitor his friends to make sure they’re not involved. He may’ve seen things he shouldn’t have and are now acting them out. Sometimes it’s innocent actions, but allot of times it’s not. You’ll need to ask him if anyone has touched him and etc… You never know. Child protective services may consider this child neglect and acquire him. I'm not turning you in because I know you weren’t aware.Please take the proper measures so your son won’t continue these actions anymore. This can grow into something much more serious if you don’t. Arrest may happen the second time.