Where should I go from here?

This is a tough one, I think you are going to have a cross dresser on your hands, honestly. Now that he got the feeling of it and likes it though, there really isn't much you can do about it. If he is going to cross dress, he is going to do it behind your back if you don't let him do it in front of you. So I really don't know what advice to give you except just to watch out for it.