Petrified GS

Question
German Shepard - paranoid of me when we are alone, loves me to death when others are there.  
If we are alone, his tail goes so far between his legs that it literally sticks to his stomach and almost touches his front paws.  He pees everytime I'm near him, again, only when we are alone.  If I say good boy, he pees, if I say come here, he pees, no matter what.  It got to the point that I figured he recalls one incident that hurt him when he was 7 weeks old.  I went to take him out and he ran away, I caught him at the last minute and he was in between the screen door and the door came back and caught his leg as the door shut.  Obviously, this hurt him badly and I feel he associates me with causing pain from that one incident, but other than that, I've never raised a hand to him, nor hurt him in any way.  Yet, he cowers to the ground, pees all over the place (with a raunchy smell) and is simply just not comfortable with me.  As I was saying, I got to the point where I just wanted to play with him for a long time and have him realize that I am fun, not a mean guy.  So far so good, for about a minute, I got him to actually roll over and I started scratching his belly and to my surprise I get a squirt right in my face.  This obviously didn't make me happy, but again, didn't raise my voice, didn't do anything, just went and washed it off.  I feel if I was to raise my voice or discipline him for that, then he definitely wouldn't even accept me.  
Any explanation?  Also, I should probably mention that I do not live with the dog, it is my fathers, but I did the majority of the upbringing from 7 weeks to 3 months, then I moved out, but still see him once a week at least and as I mentioned, he is great with me if any other person is around.  I feel he is holding something against me and I've tried numerous ways to correct it, but the other day, when I couldn't even get him to come to me to eat a treat, I got worried, then I tried an actual piece of STEAK, any dog in the world would jump at that, he wouldn't even look twice.
When the "pack" leaders leave for vaca, he doesn't Eat, poop and worse off DRINK, I've never seen a dog not drink one drop of water in 3 days and still have all the urine he has to spread all over the place.


Answer
I am not sure dogs understand we do things accidentally.  Not that they never hurt us accidentally.  Well, I don't think they mean it when they slam their heads into ours and then stand there and look puzzled while we writhe in pain.  Maybe my usual recipe for submissive wetting will help.  

Many dogs eventually outgrow it, but you can reduce it by building the dog's confidence up.  Start with obedience training.  The key to most behavior problems is approaching things using the dog's natural instincts.  Dogs see all the people and dogs in the household as a pack with each having their own rank in the pack and a top dog.  Life is much easier if the 2 legged pack members outrank the 4 legged ones.  You can learn to play the role of top dog by reading some books or going to a good obedience class. A good obedience class or book is about you being top dog, not about rewarding standard commands with a treat. Start at http://www.dogsbestfriend.com/  As you praise the dog for following your commands, it will build its confidence.  

Play tug of war with the dog and lose.  However at the end of the game, take the rope or toy and put it up, less the dog becomes confused about who is top dog.  Ropes from the pets' store quickly turn to hazardous shreds.   Ones I made  lasted much better.   Go to a hardware or home center that sells rope by the foot.  Buy 2' of 3/4" poly rope. Melt the ends, and tie  knots in it.   Get them as tight as possible, put it in a vise and pound it with a hammer.  Watch carefully, and be ready to discard when it comes apart.

Finally, make sure it has a den to live in.  If you are not using a crate, buy one.  The dog may be happier in its den than loose in the house.  It relaxes, it feels safe in its den.  It rests, the body slows down reducing the need for water and relieving its self.  Dogs that have been crated all along do very well.  Many of them will rest in their crates even when the door is open.  I think the plastic ones give the dog more of a safe, enclosed den feeling.  Metal ones can be put in a corner or covered with something the dog can't pull in and chew.  Select a crate just big enough for the full grown dog to stretch out in.

A dog that has not been crated since it was little, may take some work.
Start out just putting its toys and treats in the crate.  Praise it for going
in.  Feed it in the crate.  This is also an easy way to maintain order at
feeding time for more than one dog.