UKC Dog Sports Judge
It would be a great idea to hook up with Howard and Beth to see what they think...
I would also suggest going back to your basic work, so that he can "win" and do it right. Don't repeat the same thing over and over, since with the GSD, they seem to get bored easily, and then start to figure out what else to do, most of which just pisses the handler off.... :-)
I would NOT replicate the problems that you are having with drag work, however. Always work with a spotter, and make sure that they know what to look for.. there may be contact somewhere on his body that you don't know, there could be an environmental memory of pain (going by your description of what happens when you try to work him in public). What I mean by that, is when you have him in the same environment as what he was in when he first got hurt, he could be anticipating that same pain, thus the refusal. Having someone watch is a great thing!