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It sounds like your son may be depressed and may had some social anxiety or difficulties that is making it much easier to escape into Second Life. The problem with escapism to virtual worlds is that it's not the real world. Yes, in Second Life you can be anything, and you can do anything. But that's not real.
But living life transgendered is not an easy decision, and he really should take the time to get to know other transgendered people in the local area or a nearby city. He needs to talk to people who are living this life for real to better understand if and when he's ready to take the leap. The medication and surgical parts of transgendered living really should come after a person has had a chance to crossdress and present themselves to the world in the other gender.
It's no different than a plastic surgeon recommending women wear breast enhancements before deciding if and what size breast implants to get. Live with it for a little while before you take steps to make it permanent. And to make sure it's not a fad, or not covering some emotional or psychological need (such as the false belief that life will be easier, or people would find you more likable if you had X).
Continue to be supportive, that you'll love him male, female, gay, straight, or any combination of the above. But keep encouraging him to meet real people, to meet his basic needs (like showering, proper food, a stable job), and to work on being a healthier adult. No amount of hormones, surgeries, or transgendered living will fix all the others issues. He can change his outfit, gender, and sexual orientation, and still have the need to take care of himself... which he isn't doing now.
I would recommend that he look on Meetup.com for groups nearby that interest him, where he can start having more social encounters with people who share his same interest. This can be a lot safer than dating or bars. He can also look for a local GLTB support group in his area to help talk about the confusion and choices he's facing now and in the future if he wants to pursue transitioning.
I also do not like the idea of a Second Life relationship because the perfect world doesn't have the pesky problems real life has: cleaning house, fighting over a budget, dirty laundry, fighting over your partner snoring, etc. It's the best parts of a relationship, with no real foundation because it's not tested by daily life. Second Life friends can be great resources, but dating relationships are usually doomed to failure in that world because it doesn't transition well to the real world. You also have no guarantee that you're talking to someone who is really available (i.e., is he really talking to a man, and is that man really single). Most of the people I've met and talked to in Second Life are dating in world, but married in real life. So he's really opening his heart for heartache by taking a virtual world so seriously.