Dear F.,
Could there have been an incident at playgroup where another child was rough with him or scared him somehow?
I ask because my son is almost the same age (22 mos.) and has similar issues. One of the things that I think triggered them was that in Music Together, when he was 16 months, a slightly older boy (almost 2) pushed him and knocked him down on several occasions. I wasn't happy about it at the time, but I didn't realize how significant it was until -- weeks, months later -- I realized that my son had become scared of all other children. Remember, at this age they don't have a lot of data to go on, and they can't put things into perspective. So a little bit of rough, too-physical behavior on the part of another child could lead your son to conclude that all other children are terrifying and dangerous.
We are dealing with the problem in part by doing one-on-one playdates in different settings. My son is much more comfortable playing with just one child in an environment where he wasn't pushed/bullied previously. An open space, where kids aren't right on top of each other, is really helpful too. And it helps to pick playmates carefully. My son, oddly enough, does really well with a little boy who's super active. This kid never does anything -- including anything remotely threatening -- for longer than two seconds at a time, so my son doesn't find him scary.
I don't know if your son experienced anything remotely similar, but I do recommend trying different kids, different setting.
Good luck! Drop me a line if you like, and let me know how things are going.
Mira