We are making progress, fast! So here is an up-date:
I started on Tuesday just getting him to keep his head out of the treat bucket. I clicked/rewarded him when he looked the other way.
Since he took all that in so well, on Wedsnesday, we moved on to getting him better with my fingers in his mouth. I put my finger in his mouth and at first he jerked his head away but after a few clicks and treats he got the idea.
Yesterday I brought the bit into the picture. Since he is used to there being peanut butter on it I used the bit as a target. Holding the bridle (sans the noseband, I thought that was too much leather for training) and clicker in one hand I said, "target" and waited until he touched it with his nose. He caught onto that really fast so in a later session that day(I do about 3 a day) I held the bridle at chest level facing me, like it would if the horse were in it and facing me, that way he could stick his head right into it.
We played the target game that way too and gradually he began to get more and more determined to get the treats so he started taking more and more of the bit in his lips. Today, I did that same thing and he picked the bit up in his teeth!

I am so happy! Now he gets a click when I hear/see him pick up the bit and if it touches his teeth.
He is a really smart boy so I'm not that surprised that he is doing so well but should I slow it down or keep going at his pace?