I got in on this kinda late, but you are getting some great advice. Don't give up on this boy! You will probably never know what kind of traumas he has gone through. Have him completely medically checked out for anything that could cause behavioral problems, have him neutered, and provide him with a nice, dark den (crate) to hide in when he needs to.
My Bela girl was a rescue. She was a puppy mill mama and went to SR at 5 years old. She had been kept in a very small cage all her life, and had absolutely no idea how to live in a household with people. She potty trained with hardly any effort at all (Shelties are SMART!), and for the first few weeks it was hard to get her out of the crate. I kept her door open, and she'd sneak out and drink some water occasionally. She did attempt to bite me a few times when I would pick her up or brush her rear end. But she has hardly any lower teeth, so all she can really do is pinch you hard. She didn't bark at all for six months! I've worked with her on a daily basis, and she's now much more adjusted, though she still avoids the kitchen, bathrooms, and downstairs hallway (all with vinyl flooring). She fears thunder but no longer goes ballistic over it. Now she just comes to me and wants to snuggle up.
Your dog is under some pretty extreme stress. Shelties generally don't do well in shelter situations - it can be traumatic for them and it takes time and a light hand in helping them cope with their change in circumstances. Don't give up. Treated right, he'll soon learn that he's home to stay and will settle down.
