I've been doing some thinking, talking w/ trainers, and my trainer (whose rehabbed over 100 OTTBs) gave me a great piece of advice (that she uses with her very upper level OTTBs...all the time...even at dressage shows). She told me to wrap a fruit rollup around the bit.
Well, I tried it. He's been at my house only 3 days, but today we rode. I wrapped the fruit rollup around his mouth, and it was bliss! He LOVED the "treat" and was so busy enjoying it that he stopped fretting over the bit, and we rode all around the pasture today on a nice long reign, relaxed. I think we're finally ready to start working towards something now. Woot! We both had fun, and I can't wait until I get to ride him again!
(Oh, and he's gained enough weight that my nice Crosby saddles fit him well...it was SO nice to get to ride him in my Crosby dressage saddle and not my el cheapo synthetic just b/c that has padding out the wazzoo LOL)