While at the pet store tonight (it was too cold to walk the dogs so I took them to the pet store instead), I ran in to a man with a 4 yr old GSD. We got to talking and he explained that his GSD was a rescue and was VERY shy when he got her. He said that she was afraid of her own shadow. Interacting with her, I never would have guessed. She's come a LONG long way. That gives me a lot of hope with Lily. Lily isn't nearly as shy or fearful as that dog was so I'm hoping that with all of the socialization I'm giving her that she'll get over her reaction to strangers eventually.

We are already making a lot of progress. After reading Control Unleashed, I've been using "touch" with Lily before she starts to react. I usually recognize her pre-reaction signs so I can tell her to touch before she goes all out freaky. 

I've been taking her every where that I can take dogs and she is getting less and less reactive. Tonight she only reacted to 2 strangers - one was a worker at the pet store who was staring at Lily and the other was a kid. I think what triggers her biggest reactions is people who stare at her or are very still. 

I talked with a trainer there at the pet store and he suggested that I work on "watch me" with her. She already has a good watch me with me. She has no problem at all looking me in the eye. I reward her for doing that, but he thinks that if I really drive it home she may get over that fear of other people staring at her.

So we'll keep on working and hopefully she'll lose her fearful reaction to strange people.