I agree with Kevin -- no matter where it's coming from, it needs to stop. However determing the source (pain, training, hormones, personality growth) will help overcome it. And I don't know know what is "punishment" and what is "discipline", but I would make it a point EVERY time I see him to make sure he knows you are ALWAYS the boss. I have a mare (Jade) here who is quite the dominatrix. She's been here a year and I still reassert myself regularly with her.
Watch his behavior at times other than training also. At feeding, at visiting time, at clean up time, etc. etc. All the time when you are around. This may give you a better idea if the behavior is training related or something else. If it is training related, that will give you a focal point to start on.
For example, Jade just plainly wants to be the boss. End of story. Fine, she can boss the other mare around, but not me. So at any little thing, I will stomp agressively into her space and make her move. Example: I'm visiting the other mare, and Jade decides she wants that hay and that attention, so Jade will try to chase the first mare away from me and away from the hay. I won't allow it. It's not about protecting the mare, it's about telling Jade that I am already there and Jade is only in 2nd place. Jade gets mighty upset and flips her head all over the place, but I win everytime.
If any horse ever tried to charge me, I'd be so pissed off I'd probably freak him out just from my temper. Did you read my tale about the stud who reared over me and knocked me down? I was so mad that I grabbed his leg (which was beside my head)thinking: when you go back up, you're taking me with you, you big *&^&@! Of course, 1/2 hour later I peed my pants because I was so scared! LOL
I generally take the attitude of "How DARE you try that with me?!"
As for the dropping -- that's more common than I thought actually. I have had many people tell me about their geldings that have had successful surgery and still manage to penetrate. As long as you are certain that both testes were removed, I would leave it at that. Spending money on a "well, it might be..." is sometimes useful, but here, I'd give it more time. He's had a pretty screwed up life and may just be coming into his own finally.