boys in tutus

Wah - just got back from a preschool event where the kids' music teacher and all of the parents met for a performance/sing-a-long. Liam, who is a truck-lovin' boy boy, for the first time last night decided to put on a tutu/leotard outfit that's been in our dressup case for about 4 years. He and I danced "ballet" together last night for about an hour to bluegrass music - it was so much fun. So he wanted to wear his tutu to the music event today - no problem on many fronts - not just mine/his, but also the school is so open to gender issues, and two boys regularly wear dresses at school. Anyway, when Liam proudly walked in (who usually doesn't don these types of outfits) - one of the boys yelled, "Liam's wearing a tutu! He looks funny!" This kid probably was surprised, more than anything, but Liam rushed over to me and said, "Mommy, they're making fun of me" - after that, he didn't want to participate much with the other kids. I talked to him about it a bit after I figured out what had happened, but it just broke my heart to see for the first time (at least in my eyes) what's to come full-on. Last year at his elitist school in Cambridge, kids made fun of him for wearing a ponytail, nail polish or having a doll, but it didn't seem, at least to phase him. This did. How do I arm him with the confidence to let that stuff sail off his back - especially since I know kids will make fun of him for some of his developmental stuff down the line. Should I have encouraged him to calmly confront the other child? I want to keep my kids in a bubble!