Maddie when you approach him with the saddle blanket, you look like you're about to ambush him. Try to approach with it closed, and casual, not like you're about to throw it at him. That may be playing a part in why he got so stressed about it. Try walking up to him casually, talking to him, offer him a carrot, then go about slipping the saddle pad on him.
I do have to agree with White Foot, he may be scared if being have stirred him up in the paddock, but he appears to be an aggressive/dominant type of horse in response to fear. Some will cower at the back of their yard, Chinga lunges at you with teeth bared to make you move out of his space.
I would go right back to basics as someone said above, just stand in there casually with a bag of carrots. Let him remember that you're not going to hurt him. If he didn't associate you with the pain and anxiety of being 'beaten' then it will be easier to get his trust back. I wouldn't even go near him with a halter at the moment, you want to make yourself look as 'friendly' as possible. However, when he lunges at you like that, don't bolt out of the way. He has won, he's driven you out of his space, that is teaching him that aggressive behaviour is effective. Of course we don't want you getting hurt, so it's probably better for a very confident experienced person to do this, but when he lunges, lunge right back at him. Walk towards him, get into his space and make HIM move away from YOU. Once he moves away, then you can back off and mind your own business. It'll make him think twice about lunging at you.