I went through the same thing with my chi from a puppy mill. She wouldn't come out of her soft crate to eat if I was in the same room for four months. I became a foster for chihuahuas, a fabulous breed. The fosters showed my chi how to act like a chi. For 2 years she didn't really put trust in you...that was 4 years ago, she is a totally spoiled brat now with chi sisters and brothers that were fosters that we had to adopt ourselves. And in the midst of all this my collie went to rainbow bridge which devastated me. I adopted another collie, 3 years old that was from a puppy mill. She was scared of people, telephone poles, cars, didn't know a leash, etc. The first couple weeks she was so bad I asked my vet for help explaining her fears, she was put on Amitryptline for anxiety. After a week on this med she was slowly learning to accept things, had her on it for 3 months the last month at half the dose. Took her 7 months to learn to love life in a home where she thinks she's a chi. We have her 3 years now and is very good on leash. I also had fosters that did not work out at all.
You are a special person to take him on knowing what he is about. As you know it will take time and a lot of patience. Hope he comes around to realize he will be such a spoiled doggie. Good luck.