No, I don't think ds is making it up, although I suppose some children could use fear of monsters to delay bedtime.
I made sure ds knew I was in charge of any monsters who showed up. Make a big performance of shooing them away, saying: "Monsters aren't allowed in this house, out of the door with you". Seemed to work.
I was reading an article on this the other day, and what it suggested was that instead of telling your ds that there is nothing to be frightened of, let him see that it is quite frightening, but that it is ok to be scared. Let him see how you cope with being frightened, and let him know that whilst being scared is normal, the bad thing that he is so frightened of is not going to happen.
Read - The Hogfather by Terry Pratchett, the babysitter in that finds the monsters and um well let's say she 'deals with them!'
Seriously though, lots of children go through this, the monsters are probably made up to justify the fear as opposed to him really thinking they exist. I was petrified of being in the dark from the age of 2 up to about 13....
Both of mine are afraid of monsters. I think it's quite natural.
dd saw a bit of the grinch once and that freaked her out. For a while she refused to go out of the room unless there was someone with her. ds is scared of imaginary monsters even though he's not watched anything particularly resembling monsters. It really is a very natural thing. I would be very surprised pitchounette if your dh had not experienced this as a child. Next time he has his parents round, ask his mum in front of him, I'll bet she has a few tales to tell!
You have to reach a compromise with them. Lights on are fine, for a couple of days, but you do have to set the rules. Agree on a day when you switch off one of the lights, then another and so on.
We always keep the hall light on for the kids. Or you could get a nightlight.