Perhaps, it's his imagination running wild?
When kids are young, they're new to sounds from all over. As they learn about other things, they may associate those things with certain sounds and make them think differently.
You mentioned fluid in his ears. That's probably what made some things sound differently than what he normally expects and made him think it was monsters or something.
Since you mentioned his autism, fluids in his ears, and his up-&-down desire for background noises... anything could be the case.
