Is this a mental illness?

Question
Hello,
I have a 13 month old cockapoo named KoKo. I want to give you her background before I get to the problem.  I got KoKo when she was 9 weeks old (she was shipped to us) from the day I got her she was very very skittish, paranoid, fearful and shy...I didn't worry too much because I thought maybe she just needed to be socialized and although difficult I did try socialize her but she just never warmed up to people or objects outside.  So here are the things that make it difficult to walk KoKo...she's afraid of balls, bikes, trash cans, leaves, bags blowing, men, children, trucks, cars, some statues and the list goes on. She shakes and shivers the whole time we're outside, she won't make eye contact, she tries to yank herself off the leash if she sees any of the above items. She yanks so hard she's broken two retractable leashes and one regular lead and she's only 151bs, she's dodged into the street about 4 or 5 times just to get back home.  I do have experience with dogs (I have two others who are fine) so I understand not to push her too hard or do corrections. I've tried giving treats outside but she's not interested (her pupils remain dilated until we get inside). I've tried gentle leads and harnesses and they stop some of the pulling but if anything she's scared of comes near her it doesn't matter.  She's great in the house except for fear aggressive barking and growling at guests and not letting me know she has to go potty (this is because she's scared to go outside)....I originally thought she was abused or maybe the place I got her from was a puppymill but even if that's the case I've got her early enough to reverse that. But now I'm thinking this could be a mental disorder and I've researched mental illnesses in dogs on the net but I don't find anything about what KoKo is expreriencing...this is a very unique situation...I really just want her to be able to walk as I don't have a yard and to see her paranoid looking around and shivering outside just breaks my heart. Sorry for the long email...What do you thing and/or suggest?

Answer
One clue may be the age at which you got her.  Normally, responsible breeders send pups home to their new families at the very end of week 7.  The reason is that pups often experience a fear period at week 9 or so.  It may be that she was shipped during a fear period.  It could also be that you did get her from a puppy mill that gave her no early social experiences.  Many breeders of cockapoos or other-poo's fall into that category.  One red flag that you can check for is the guarantee you got.  A mill will generally give you a 72 hour health guarantee, but a reputable breeder will agree to take the pup back for any reason for the rest of its life should you be unable to care for it.  
My advice would be to set up a visit with a veterinarian behaviorist, who can assess your dog and perhaps even address the situation with temporary or permanent medication to help with her anxiety while you set about a program of behavior modification.  The Animal Behavior Society has a listing at their website.  
There are also a couple of good books on the subject you may want to read:
"Help for Your Shy Dog" by Deborah Wood
"The Cautious Canine" by Patricia McConnell
For now, when she seems fearful, if she won't eat a tasty soft treat, like cheese or roast beef, you are probably too close to whatever is scaring her.  Try beginning closer to home and make all her experiences positive, rather than insisting that she go right out into the "big bad world".  And, you are wise to keep a harness on her - any dog can slip a collar, and my guess is that if she ever did, you would have a hard time getting her back at this point.  Good luck and let me know how things work out.