In re-reading the OP, I'm hesitant to say that this horse needs to accept hand and leg more. He just seems super-sensitive to me, but not an over-reactor per se. I do have one question----is he adjustable when flatting? If he's not adjustable, but all-or-nothing when flatting, it's quite possible that he's just not bridle-wise, and doesn't really know how to do that yet. I've come across some impossibly-talented jumpers who clearly had holes in their basic training because of their talent---they jumped so well, nobody bothered to finish them.
If this is not the case, and he is educated in his flatwork, I would definitely try a hackamore---not one of the mechanical ones, but one of the really basic, hard-noseband/no shanks ones. If you do want to lessen his sensitivity to leg, you can deaden his sides a bit by riding bareback, legs hanging down (close the arena gate, lol). Wear jeans and sneakers (no stirrups, obviously) so that he knows this isn't a typical training session. Just walk. Practice nothing more strenuous than leg yields and stuff, and let him get used to it. Eventually he will become less anxious. With my super-sensitive horse, our first 10 minutes of walking is with my legs hanging down and my feet out of the stirrups. When I pick up my stirrups, he knows we're about to start working.
Yes, not over reactive by any means just verryy sensitive (honestly a true joy to ride) I just want to make him happier. He's very adjustable on the flat & over fences, he can just get alittle defensive (head toss here or there or the super half-halt where he almost breaks from light pull). He's ok with contact, goes in a beautiful frame, will stretch down through his back and is in general just wonderful to ride, I'm just looking to lessen his worrying when it comes to half halts/moving up.
I'm definitely going to try the above suggestions, starting with the non-mechanical hackamore, since we can get away with it in the jumpers.
Here's another vote for a hard, black rubber mullen mouth. My TB mare is very sensitive about her mouth. This isn't necessarily a bad thing, you just have to find the appropriate bit. I was riding her in a sprenger kk snaffle (french link type) with moderate success. If I rode her on a loose rein, it was great, but once I asked her to work with contact, she was fussy/over reactive. I believe that a horse needs to accept contact in order to truly work correctly, so this was disconcerting. However, I had had so much success with this bit in the past, that I assumed she was just being a typical green mare that needed to get over herself and figure out contact. I was riding her in a clinic with Greg Best in the sprenger bit. He told me that he thought my mare was over-bitted, which shocked me some, as our bit was definitely the most mild bit in our group. The other horses were in cork screw snaffles, waterfords, etc.. He must have noticed my suprised face and said, "Don't get me wrong, this is a very mild bit, but I think your horse is an extremely sensitive and hot type that may benefit from a plain rubber bit." After coming home from the clinic, I bought a plain black rubber mullen mouth dee. It has made a HUGE difference in her attitude and way of going. She is no longer worried and is so much happier to accept the bit. My dressage instructor was thrilled!
When I've had a horse like this the first thing I have done is had their teeth floated--even if they are not very bad. I usually found that that made a huge difference in their acceptance of the bit. And then for the uber sensitive one I go with a regular rubber mullen mouth--a dog bone bit, if you will. That has been how I've dealt.
bought the short-shanked hackamore from smartpak and he LOVED it. I could actually ride forward out of the turn! Now I wish I would have bought the more expensive, nicer-looking hackamore. I've already oiled it twice with hydrophane... still light.
Put a dressage caveson on him, minus the flash attachment. Then use a cord and tie the bit a LITTLE up into the top of the wrinkles at the corner of his mouth. You tie the cord to one ring, pass it through the flash loop, and tie it off on the other bit ring. Experiment with the tension. It will transfer the bit action to the nose after a certain pressure is reached. The tension of the cord determines when the nose is used.
I have used this on babies, super sensitive types, reschoolers and ex race horses. With a flexible Nathe bit.
Or, two reins: one on the bit, the other on a jumping hackamore...the kind that has no leverage or metal.