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[TsPoet]

Darby,
I have a lot of experience rehabilitating fear aggressive and under-socialized dogs. On an individual basis (I'm not a trainer, I'm just a sucker).
1st - Lisa's post is on the mark. I know it's hard, but you can't let yourself feel guilty and wait too long to remove a dog that could be dangerous for your family. Also a fear aggressive dog is stressed all the time, that's a difficult way to live.
2nd - you are on the right track with training and the like and as long as you feel like you can, keep it up. But, see #1 - it's very important.

I have 2 dogs that have issues. I've had Murphy for 6 years. Murphy is extremely fear aggressive and with what I know now, he should have been put to sleep, for everyone's good even his own. They considered putting him to sleep as unadoptable before I came along, he should have been. I love Da Murph with every fiber of my being and I'm so glad to have him around. But it was 3 years before I could have anyone in my house without locking him up. It was 4 years before anyone other than me could touch him. I still can't take him to a public place without watching him like a hawk – I do it all the time, though.
I got Finn about 2 years ago, I had gained a reputation as being able to rehabilitate a dog with Murphy, so when a feral dog was caught in a badger trap, they called me. One thing I learned from Finn is that I learned nothing from Murphy. The other thing I learned from Finn is that dogs are completely different from each other. Within 6 months of having Finn, she passed her CGC (canine good citizens) and she's a sweet love, with huge fear issues that are always on the verge of turning into aggression, but so far haven't. I can't believe they were considering putting her to sleep as unadoptable.
Murphy and Finn are both much smaller than Rusty, and that's an important point.

Learn doggie bad “words” and avoid them – never make eye contact. Staring is aggressive to a dog. Ask people not to make eye contact with him.
Never hug Rusty, never hover over him – these are aggressive behaviors to a dog. Never kiss, him, again, face to face is aggressive to a dog. Let Rusty “greet” people not head-on, never come up face to face – polite to a human, rude to a dog. Come up to him from the side and let him go up to people from the side. Don't walk behind him, either, never out of where he can turn his head and see you.

And the most important thing -
After you get basic obedience with Rusty, I highly recommend tricks. Tricks build confidence and are fun. Tricks are how you distract a fear aggressive dog from what they are afraid of. Tricks, tricks, and more tricks. Shake, spin around... roll over is a tough one, a dog is very vulnerable doing a roll over. But, if you can get a roll over in the privacy of your home, then that forces him to have confidence in you in a controlled environment.
Clicker training to do tricks is also recommended for many dogs (Finn is afraid of the clicker, so it doesn't work for her).
Don't hesitate to use treats, make sure the tricks are fun. You can get dog food like this
http://naturalbalanceinc.com/dogform...Treatroll.html
at Petsmart – I would **never** feed it as dog food, but chopped up into tiny (and I mean tiny, dogs don't know the difference between a 1” chunk and a speck) it makes a wonderful treat for doing tricks. Any situation that might make him upset, quickly make him do a trick, make it fun. When you are playing to distract from stressful situations, feed multiple tiny little specks as if it's a huge party, rather than one big chunk – makes it part of the fun.

Consider a CGC class.
Check with your local dog training clubs, most cities have them, and they will know about CGC and trick classes. Don't worry about passing the CGC, no way Murphy will ever do so, but he's taken 2 classes. In fact, over the 6 years I've had him, Murphy and I have taken: beginning obedience (2x), intermediate obedience (2x), CGC (2x), beginning rally, beginning and intermediate agility, and now we are in beginning freestyle. Murphy doesn't need many of these classes, is obedience it excellent. But, the controlled environment is perfect.

It's constant work with these guys.