My first reaction to this one is 'this poor, poor animal'. He's lost his owner (and GSDs are very much one-man dogs), his home, and all he knows/knew.
Immediately you saw he wasn't going to tolerate outdoor living, you should have realised you needed to change your plans with this lad, or at least given him time to adjust before pushing him outside. Sheps, shouldn't drool - did it ever occur to you that, stress apart, he might have needed a dental? And with a good daily grooming, his shedding would have been brought under control - and stress can make a dog shed more than normal too (witness what happens with some, at the vet's)
It was good of you to take him on, but if it was, from early days, pretty obvious this boy was more than you could cope with, maybe contacting GSD Rescue would have been a far kinder way to go, for this dog. As it is, he's now 2 years down the road, and has completely gone wrong. And even if you now contact Rescue, whoever takes him on is going to have to climb a mountain to get him back.
If you have come to this point (hate him? Seriously?), please do contact GSD Rescue, so he can find, hopefully, a home where somebody experienced will understand him, and help him to adjust to living without his original owner.
Don't HIT dogs!!!