I would suggest getting a proper lunge whip. You can't really hurt them with it unless you decide to beat them, wich I'm sure you won't. If you are using a round pen then the first step is to get him moving out, which you will never do unless you have a whip of some sort. What you discribed probably won't work until you have his respect. The key to lunge whips is that you can make a great amount of noise without actually hitting them, if they don't respond to the noise then you lay it on them and if they don't respond to that then you give them a tap, then a wack.
Also when you are leading if you have a crop to reinforce your commands that really helps. You have to understand that if he was left for his first year and not peopled then he doesn't know to respect you. You must show him. Is he out with other horses? If not I would definitely put other older horses out with him. They can teach lessons in minutes that would take you months.
The only other thing I could suggest is finding a trainer that will come and do "lessons" with both of you. Get them to help you out in a lesson situation...this way you aren't paying the big money to get him trained but you still get the help of the trainer.
Good luck and hope everything works out for you both.