Feel free to PM me any time if you have more questions.
It sounds like you are making good progress, the only thing I'd say is that medication (I like fluoxetine - generic Prozac) will facilitate the training and speed the progress.
Also just a general note on this type of behavior: Often times people assume that the behavior is because of previous physical abuse. This isn't always the case. If a dog is isolated or not exposed to "normal" stimuli (socialization) or exposed to fear inducing stimuli during important psychological development time period (generally 6 weeks to 6 month of age) a serious life long issue can result. I'd say this is also a type of abuse, just not physical abuse.