Socialization not really working? (Ratsicles)

I tend to truly agree with Mudpuppy here ... I think 'terror' was very very early instilled and altho it sounds like the 'inner puppy' may be alive and well inside of him, only very very gradual desensitization will likely work  Literally I mean desensitizing so slowly you barely register it as progress.

That early abuse is so easily reinforced because he puts himself in that exact position -- he's giving off any signals he can to make YOU think he's 'ok' (so he'll get left alone). 

It has taken us THREE and A HALF YEARS to desensitize Billy to the damage done just prior to our getting him.  It wasn't long term abuse -- it was one situation where he was fostered, but because it was so associated with incredibly severe pain (his ears were grossly infected and the little she-devil who hurt him apparently went for the ears) it made such a lasting impression. 

BUT .. I say that to say this ... we have made progress.  HUGE progress.  I will never ever trust him in certain situations.  But he has made enormous progress.  So will a stranger ever be able to touch your dog?  Depends ...

I grieved over Billy's problems for a long time.  This was a dog we adopted specifically to do pet therapy.  The rescue group didn't want to give him to us BECAUSE ***we did NOT have kids***.  They had marked him as "loving kids" ... and then they gave him to a woman to foster who fostered emotionally handicapped children and it wasn't properly supervised. 

We've rehabilitated 3-4 dogs who were absolutely unbelievably terrorized and have had super good luck with it.  But it takes time, and it takes incredibly slow slow desensitization and confidence building. 

I'd work with him on something completely different since he's really good at some forms of obedience.  Tracking or something that will get the 'inner dog' all excited ... something he can 'do' without having to have his success hinge on "come".