Aggressive Puppy Behavior...Help!

Hey, I've been browsing the forum for awhile in anticipation of getting a new puppy. We finally got one and he's adorable. However, over the last week he's developed some very aggressive behavior.

He's 9 weeks old and he's a Lab/Shar-Pei/Blue Heeler mix. A neighbor had some accident puppies (the parents were rescued and they had been assured that both had been spayed/neutered) so we took one home with us. We visited multiple times to work on picking one out and this little fella was very sweet. He's been mouthing a lot, which I anticipated. However, he frequently goes into crazy dog mode and pins his ears back, barks, growls, and bites aggressively. It has gotten to the point where he's biting us or our stuff most of the day. I work on substituting a toy for furniture or a body part. This works briefly. We've tried the "Ouch!" tactic, but this only seems to provoke him or, if he stops, he quickly becomes occupied with biting someone or something else. We've tried working on some of the My Smart Puppy exercises, but we can't get very far because he lunges after everything or will immediately start biting. Everything I've read says not to use his crate as punishment, but we don't really have anywhere else to put him that is free of bitable objects.

I've managed to get him to master "sit" but he doesn't obey when he gets into crazy dog mode. I try working on "stay" or "down" but he doesn't sit still long enough to get through the exercise. I've tried working on the "Mine" and "Off" exercises from the My Smart Puppy book, but these just seem to provoke him to bite.

We exercise multiple times a day. We're usually outside for at least an hour at a time and we're actively running for at least 20 minutes. He was picking up on fetch, but hasn't been as obedient over the last week. Now he just likes to try and chase/bite me or just sniff around.

As a health note, he has an umbilical hernia and the Vet said that this should not cause him any pain problems and they will remove it in a month or so. Should I look into getting another opinion?

It's been 10 or so years since I had a puppy and my wife has never had a pet. We always had Blue Heelers and I don't ever remember any of my puppies being this aggressive. My wife is becoming increasingly frustrated and upset by his new behavior. Is this just puppy rebellion? Is this a puppy stage for one of those breeds? Is he in need of some professional care? Are we missing some training/exercises?

Any help would be greatly appreciated.