M.L.
No more second warning, put him in time out the first time and make it very clear this is inappropriate behavior.
As a side note, I think it's weird the teacher couldn't handle a back talking 3 year old and sent him to another classroom.
Dr. Sears has some good advice on this here though (scroll down for the "talking back" section):
http://www.askdrsears.com/html/6/T063900.asp#T063200