Sue, I have slowly been disensitizing Pinto to whips for 6 years, and he is now 500% better than he was. In the beginning he couldn't even be in the same space as one if there was one propped against a wall.
He will actually target a short stick very nicely, but he is very astute. He knows when one is being used "with intent." So he can be ridden in a group lesson when others are carrying whips and be OK. He tends to get worried if you are riding with one in your hand, and he is hypersensitive to it, but is generally OK. The problems really arise if you are on the ground with one, and I can only think that somewhere in his past he has been abused, or that he has done something wrong and he has been punished for it.
For a long time he would try and climb the walls in his box, sweating from head to toe, eyes rolling if you went into the box with a whip or a rope.
He used to get so worried if he did anything "wrong" e.g. not long after I moved to my yard about 5 years ago, I lunged him by myself for the first time, just in a headcollar and line - no whips or anything. After about 10 minutes I tried to move him up to canter, and after a couple of strides he whipped round wrenching the lane out of my hand. I then couldn't catch him, I couldn't get within 20 feet of him. I ended up calling a friend and I actually had to leave the manege and go out of sight before he would calm down enough to be caught - and he walked straight up to my friend, so it wasn't that he was scared of the trailing line. Once he was back in his box, he still wouldn't let me anywhere near him. Only when the box door was closed and he was "safe" did he lose some of the tension.
Sorry, I didn't mean for this to go sooo off topic, but I did just want to highlight thati think there are somethings which are going to take longer than others to put right.
At the moment I would rather Pinto be not so active on the lunge and be happier with me holding a whip (no matter where it is) than him rushing around being worried and tense. And I'm not trying to let his Pinto-isms be an excuse either, I do want us to improve and I'm taking all you are saying on board, honest

I dont think you are making excuses atall, every horse is different and unique as is each persons relationship with that horse and you are just explaining a little of where the two of you are at.
In which case I would say you are doing the right thing generally with the idea of how you are using the whip indirectly.
I do think its useful to be able to have a horse accept a whip for direction and if the best way to approach this at this stage is obliquely then that is fine.