nervousness

Question
Background:  
Name, Breed and gender:  Pudge is a rescued mutt but as far as we can tell, he has a generous amount of beagle and then pug.  I did see his litter siblings at the pound and they ran the gamut to long to short hair, large and small. In other words,  Lord knows what mix he is.  We adopted him at about 4 weeks.
Age:  2
Personality and household:  He is a cuddly comedian, dog friendly.  He has one dog sibling, a female, two years older, who had all the right maternal, canine instincts when it came to puppy correction.  They continue to get along very well.  He is definitely the Omega and takes on the job of alerting us to strangers and their dogs walking by the house.
Additionally, the mastiff next door who seemed desperate for a puppy was very engaged with him.  However her sheer size MAY have been a fear factor for Pudge.  If so, we were unaware of this mistake at the time.
Dog Park behavior:  The community dog park is divided into small and large dogs.  Pudge at 25 lbs. is somewhere in between, so we always chose to bring him in to the large dog section with our older and larger (30 lbs) dog.  The small dog section had dog owners that did not appreciate his running around with their 5-15 pound animals.  On the other hand, this meant he was always the smallest among the large dogs.  He responded by running like a maniac, rolling over when they caught him and hiding under human legs when he was tired.  We did not realize how much a target he was making himself.
Trauma:  He was attacked at the park by a German Shepherd, who was intent on shaking him to death.  This lasted less than 10 seconds, but that was a very long time.  We immediately called our vet for behavioral, psych advice and got none other than bring him in for wounds.  (There were a few small skin breaks around his neck.)
Our Actions Since Then:  We only allow him in the small dog section.  We walk him, although not frequently enough.

The problem behavior:  During walks or when encountering other dogs (99 of the time) he is a mixture of dog aggression and submission.   His aggression consists of uncontrolled barking; his submission of running away or a loud crying.  He is demonstrably uncomfortable.
His behavior in other situations is fine.  He remains his innate cuddly, comedic self and continues to play well with his sibling.  The next door mastiff has moved.

What we've tried:  When a calm, dog friendly dog who is unfamiliar to Pudge is available (which is all too infrequent), I will walk both dogs in parallel.
While walking Pudge and he begins his howling/barking, I stop the walk, make him sit, wait til he's calm and continue.  I've tried calming him with soothing touch and words during the sit, but have read that this is counterproductive.  I'm utterly confused as to what to do.
I have read that this sort of howling bark may be a sign of insecurity.  I have tried to assure him of his role in the household, award him frequently for jobs well done, correct him with a limited No! and/or exclusion.
He remains nervous.  The only change in his behavior is that he no longer rolls over, but continues to run, bark, howl and generally give off the signals of nervous insecurity.

Answer
Hi Andrea, Thank you for the detailed background on Pudge. As you probably already know, you must walk him at least once a day at the heel and establish yourself as pack leader who will not only discipline, but protect him. When you see another dog, calmly walk him past with confidence. I do not know where you read that having him listen to you when he is upset is counter productive. Begin by having him walk calmly past other dogs without sitting, so you are keeping his brain moving forward. Surely giving him affection while he is in a nervous state is not advised, but asking him to obey your commands is not a bad thing at all. He must learn that he can trust you and that you have everything in control. This will build his confidence and he will realize there is no reason to vocalize his fear. Please remember that fear can lead to aggression. When you walk him and find that there is a large dog in the area, walk him past the large dog over and over again until he is confident that by listening to you he will not have anything to fear. Eventually you can enlist the help of a neighbor with a large dog to walk past you and eventually along side you. Be sure that the neighbor you choose has complete control of their dog and that the dog is not aggressive or fearful. Pudge has suffered a trauma and needs to have his confidence restored. When you pass other dogs be sure to place the people in between the dogs, not dog to dog. Walk at the heel at all times. This exercises mind and body. If you can enlist the help of a good canine behaviorist in your area, it would be wonderful. Most behaviorists have education which your average trainer may not have, most have payment plans, and you do not usually go for weeks on end. Most will do an evaluation, a session (which can last a couple of hours), and schedule a follow-up visit after you have done your homework. It is probably less expensive than you think.  Shame on the owner of the German Shepherd for allowing an aggressive dog in the dog park without complete control. After rehabilitation, you should make it your goal to bring Pudge back into the large dog side (when that shepherd is not present), to show him that all large dogs are not the enemy. Within the home, you should discourage Pudge from barking at dogs passing by your house as this only feeds his fear. As pack leader you can claim the window he looks out of and tell him that he must not bark at every little thing. It sounds like you have a good grasp of the problem and with consistent work, you can overcome. If you have family or friends with calm, submissive dogs, have them come to visit allowing both dogs to socialize off leash in Pudge's territory. If you live in Florida, email me privately. My website is whttp://downes.8k.com (under construction, but running). You could also read some of my other posts on this site about pack leadership or get Cesar Milan's book on pack leadership to help you. Please leave me some feedback and a follow-up to let me know how you are doing. Thank you for writing. Warm Regards, Susan