I was afraid of that. His options at this point are limited.
As you can imagine, sexual offenders are monitored closely and strictly. There are all sorts of prohibitions and restrictions (even with juveniles) on their activities and associations. I am sure you would agree there are good reasons for this... but it can go too far. While these standards are designed to protect children from future abuse, probation officers can and do go overboard in their interpretation and enforcement.
Here are the steps he can take:
1) Speak with his probation officer and have you and your husband speak to him/her as well. You can assure the po that he will not be left alone with the child and will be under constant supervision. Further you can reassure the probation officer that you understand the severity of what he has done and how careful everyone must be around him. This may give the probation officer some confidence that everyone is taking this matter seriously and will take steps to protect those who cannot protect themselves (small children).
2) If you cannot get anywhere with the probation officer then you can always petition the judge to modify the conditions of probation. His attorney can tell you whether or not this would be a worthwhile pursuit as he/she will know the judge's tendencies in matters like this. I can tell you that the judge will not likely change the conditions or restrictions if the probation officer is strongly opposed to it.
It may be that the probation officer will want him to abide by the current conditions for a while before gradually permitting him more access to your home. If this is the case then it may be the best solution, however you should discuss the matter with his local attorney to confirm your best solution.
Please reply if I can help further.