This sounds a lot like what happened to Mark. He turned out to be allergic to his formula and his digestive enzymes got all screwed up. He was on Pregestimil, a predigested formula, for quite a while.
Eventually, it turned out that it was the milkfat. We, gradually, got him onto nonfat milk and, as he got older, onto regular lowfat milk. He's been fine, since he was 1 1/2.