What happened to the small boy with the birthmark who claimed he saw the beastie (snake) in chapter 2? What effect does this have on the boys?

Chances are good that he was burned in the fire that spread across the mountain.

This is the first glimpse for the boys into the reality of their situation.  They try to act like the young boys they really are, and someone dies.  It's a tough position for them to be in because they are all used to having society and adults set parameters for them.   Now they're in a situation where they have to learn to govern their own behavior and accept consequences for their own actions.  The death of this first little boy is a harsh jump into that reality.