I would suggest continued work, but would also consider sedation for a time or 2 so he can see it's not so bad.
I wouldn't use Ace, they don't comprehend lessons while aced and some horses fight right through it. You might talk to your vet about Demorsedan, you can give it iv, im or they make a gel that you put under their tongue. I used the gel on my youngest stud when I first got him so I could get his sheath cleaned without getting nailed. (Didn't have an extra set of hands to hold up a leg) It worked well, not completely dopey but took off the edge enough to get it done without a fuss. After that once he was okay with it. If they do give you the gel, be sure to ask for a set of impermeable gloves.
Life is like a camera. Focus on what's important, Capture the good times, Develop from the negatives and if things don't work out, Take another shot.