If you are concerned then by all means go ahead and speak to her as you have already stated. I must add though please don't jump to conclusions. All kids become curious about their bodies and bodies of the other sex and they literally probably were tickling each other, one child may have got him in the crotch areas and because they would have been all laughing, the tickling became a game.
Hence him doing it to you, but because you are telling him it is not right he is now confused. I am not saying by any means not to investigate, just keep in mind it could be completely innocent. You also had no problems with your friend watching your son so you shouldn't all of a sudden have such prominent views about her home life.
If you didn't feel it was the environment you wanted him in you wouldn't have had him there in the first place.
Since in your mind you connect it with what goes on at your friend's place, that's probably a gut instinct that is correct... so stop sending your children there. You are right about that. I would not put any weight on what the 4-year-old says... could be informative and could be misleading.
I would let it go with him, as you don't want him to get feelings of guilt or shame, or on the opposite end, to continue the behavior because he realizes he is getting your attention. As you said you are doing, tell him no, then move on. As for talking with your friend.... not sure what you want to accomplish by that, and not sure if you will get what you want out of it.
It's just important that you stop having your kids there, but you cannot hope to change other people.
I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.