Oh my goodness! Poor little thing... That is just terrible. Tears just about came to my eyes reading your post, because I too have an 18mo ds, and it is just so hard on the parents when the baby gets upset or scared... So I'm sorry for you too!
I don't have much advice for you, unfortunately. But I did just want to let you know that I don't think he'll be traumatized long term or anything by this unfortunate incident. I would expect him maybe to be clingy and jumpy for a few days? He may have a nightmare or two as well, because I know this is the age where they can start experiencing that sort of thing. It's too bad that he's so young as well, so he wouldn't understand you explaining to him what actually happened (that it was just his family acting like morons....).
Anyways, try not to worry about it too much, I'm sure he'll be fine! Just try to be extra attentive to him if he cries at night, or needs you more during the day.
Whiskers