Hello again everyone,
My deepest apologies for taking so long to update this thread. Thank you all for the support and the suggestions.
It ended up that, while he responded great to the high-dose steroids, as soon as we backed off on the dose he regressed back again. The neurologist was as disappointed with this as we were.
After some careful consideration, we went with the back surgery. This involved removing the top portion of one of his vertebrae to give the spinal cord some additional room (the swollen discs and birth defect were putting pressure on the spinal cord).
We were not prepared for the sheer SIZE of the incision when we picked him up. It was nearly 6 inches long, going from the top of his head straight down his entire neck. My wife had to leave the room when we first picked him up.
In the 3 months since the surgery (and our last update) he has had what the neurologist calls a "near miraculous" recovery. She said she has never seen a dog go from a procedure like this to running around like an idiot so quickly.
We now have our little boy back. He is doing his B-500's, running and jumping on and off the couches (even though we try to minimize the jumping off).
We hope to have the "easy financing" paid off by february next year (the total cost was brutal, but worth it).
We don't think he'll ever be 100% as far as his legs are concerned… he still will occasionally knuckle over, but he is much quicker to correct it now, and he has gotten a LOT more confident walking on tile floors (good for him, bad for us... he can now do naughty things in the kitchen as well as living room).
Thanks again to everyone for their support and suggestions. He was a real trooper through the entire ordeal.