It may make no difference but is it an english or western saddle? Western saddles usually have lots of straps and accesories hanging from them and that alone can make a green horse spooky.
Is he fine with just the pad? If so, grab yourself a cheap english saddle, pull the stirrups and the girth off and gently toss that bad boy up there. See if that doesnt make a difference.
I love the idea of approach/retreat with him but I would keep taking it to the next level. Once you get that saddle on him, give him lots of praise (and even a cookie) and take it gently off. Then go right back to it. Put it on, ask him to take one step forward and stand for say 5 seconds. Repeat cookie and praise and then take it off.
How does he tie? Does he stand patiently? If so, approach with the saddle...when you get a reaction out of him, stand your ground. When he stops reacting, take it away and give him praise. Keep going until you can stand next to him with it.
Will he allow you to 'show' him the saddle? Let him have a good sniff of it...let him really eye it up. Maybe even put it on the stall door or over a RP panel. It sounds like he is truely scared of it...you have to show him its not a predator.
Go at any of these projects like you have all day to do it. Stay calm even when he isnt.
Theres a few ideas for you. Keep trying and be patient. When your patience runs out, consider a trainer.