Biting and Hitting - what to do?

Max is a very good kid. Yes - many mom's say this. But Max really is. He says please and thank you, he gives lots of hugs, he obeys 85% of the time (which I think is remarkable for a 3-year old), he tries hard to be good, he tells me when he is mad, I can watch his mind remember as he is about to do something bad that he is not supposed to do it - and many times he stops himself. I think that is pretty good for a three year old.

So what then, are you supposed to do when he flips out at school and has a bad day? Today he bit his buddy on the cheek (all the suddent that spelling looks wrong!), and then scratched another classmate on the face. Max KNOWS these behaviors are bad. When confronted with them, he won't even look me in the eye because he knows he shouldn't have done them. So how can I handle them? I am not there when they happen - he is at school. The school has a strict 'No Time-Out' policy - which I think is BUNK - because time-out is how Max "steps back and decides to try it again, but the right way this time." I come to pick him up at the end of the day - and I hear the reports of his bad behavior. It doesn't happen every day. And on days when it happens, most of the day he is really good the rest of the day.

What I did today: when I got into his class, I asked Max what happened to his friend's cheek, and then went and picked up his friend and played with him for a minute. Then we had a discussion on the way home about how we don't bite and scratch etc.

The teachers all seem to think that it is because he is by far, the smallest kid in the class, and because he is still just adjusting to the new class. (He is on par with talking, motor skills, etc. but just not as tall or big as everybody else)... Others think it has to do with where he spends his weekends - which may be a factor. It would be really hard to have two homes, two separate parents that you have to balance out. Maybe he is still a little sick from the strep - and the new antibiotics he has to take make his tummy hurt. Maybe it is just a phase, and I worry too much. I just don't want to be negligant. But I don't want to freak out. What would you do?