Wow that is a hard place to be in.. For both of you...
Have you contacted any other near by (as in hours away) rescues? Man, that is so sad the rescue turned the dog down.
If it's fear aggression, your going to have to find someone who is willing to put a lot of commitment and time in, otherwise it won't last. They have to go slow, make sure with any new meetings with people they are just there to check him out in his environment and they are not to proceed in his space, which includes eye contact. Second meeting do some counter conditioning with the new people. Best resource for me for this with my fear aggressive dog to strangers is, "The Cautious Canine-How to Help Dogs Conquer Their Fears" by Patricia McConnell. http://www.amazon.com/Cautious-Canine-How-Conquer-Their-Fears/dp/1891767003/ref=sr_1_4?ie=UTF8&qid=1393193385&sr=8-4&keywords=patricia+mcconnel It may take a few days of hours of work with the new people before he can even stand them touching him, but it works if you stick to it and go at his pace.
Sounds like he has a low threshold for strangers, and that he is not being managed well on top of that, which is a welcoming for the nippy/biting. (not that it's your fault! Sounds like you are doing your absolute best!) But ensuring he doesn't bite any more people is really important for him.
He is still so young.. So sad. I really hope you can find someone for him or a rescue that will take him despite his fear aggression. Poor guy!
Mom of: "Zelda"
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Born: December 15, 2012
In my Care: May 01, 2013