Oh, poor Rusty! I can see why he was surrendered to the pound, with all these issues. Great job in keeping your faith in him and not giving up. I know he must be trying your patience.

I saw a Dog Whisperer episode that had a little sheltie (I think) that went crazy every time the toaster popped up. Cesar made that dog confront his fears by popping that toaster in front of him over and over again. Of course, easy for Cesar to do!

Are you able to take him for long walks? The dog trainer who has helped me with Shiloh said that long walks with the person as the leader (dog walking next to person, not in front) goes a long way to improving the dog's confidence in his person/leader. I'm fortunate that I can take Shiloh out for two hour-long walks every day. I think it's really helped him. Long walks also kinda wear the dog out, which makes acting out less appealing. Shiloh would rather nap than pace and worry like he used to do.