Your DS sounds alot like my oldest (now 11). I find that kids who are the most intelligent can also be the most defiant. They are smart enough to question rules at an early age. Plus, now is the time he's seeing the world as bigger. Bigger than his home, bigger than his neighborhood. Going to kindy brings up another set of rules he has to follow. Will I still have to follow my rules at home too? Can I get away with stuff if I act differently. My best advice is to just be consistent and try to avoid arguing the point with him. This might be hard to do because smart kids can carry on a very good argument at a very young age (I swear sometimes my oldest will be a lawyer because he debates EVERY SINGLE POINT, LOL). Try to avoid losing your temper (not at all easy to do with three at home).
Just my two cents, taking away all his priviledges seems a bit excessive. I know what he did was wrong, but taking away one or two for a longer period of time might be worth a try. Piling on too many punishments at one time can sometimes make them forget what they are really being punished for. I find that usually works better on older kids.
I remember watching one of those nanny shows on TV once and the nanny stated that the older child sets the behavior for the younger one. DH and I have found that to be so true. When DS #1 is acting up (and getting in trouble from DH and I) the other two will start acting up also and the household quickly disintegrates. And vice versa. "Catching" him in the act of doing the right things can also go a long way towards reinforcing the right behaviors.
I also found it helpful to let the punishment fit the crime. If he did something wrong at the after-school movie, then the next time he would not be allowed to go or (in his case) he would be allowed to go, but not given any money to buy candy and have to do without.