That could be a good start, just remember to stop outing the dog for a while. You don't want to out the dog very much at all in the front position.
You certainly don't want to out the dog when he becomes calm and is gripping!! The out should be considered almost like punishment. Only do that for every 10 experiences where you reward, and only then after the dog has learned to grip and got over this hump in training.
Another way to do it would be to use another prey object or reward. You will also kill like THREE birds with one stone. You will use postive reinforcement to teach the exercise, which hasn't really been the case up to now. You will work a motivational out with minimal problems associated with it. And lastly you will create good feeling with the dog and eliminate the avoidance and/or conflict that is showing in the chewing, ears back, etc.
Set up the exercise as you have been doing, but have the dog's ball on you hidden away or some really good food.
When the dog returns the bringsel and comes to front he is chewy. . .so reach up with one hand and gently touch the bringsel. The dog should immediately grip it tighter, if he doesn't then put two fingers on it and pull it aside gently.
The dog will grip down. The very second the dog bites down mark that behavior with a sharp and excited "YES!!" (also releases the exercise) and throw the dog's ball to reward.
Then play for a bit and start over. As you progress you phase out the touching of the bringsel and ask for increasing duration etc. Basic dog training, just like teaching a sit. Be careful not to advance too fast. Take your time.
This can also be achieved with food, if the dog will take food and release the bringsel. You won't ever be using the bringsel as a prey item again so the dog should take the food and release the bringsel.
Food drive is very simple to get, don't feed the dog the day before training. He'll have food drive enough for this exercise. I prefer food in the begining. It is more precise and quicker to start using. I'll phase out the food and use a ball for better response after some time.
Either way, this will also lay the foundation for a motivational out and eventually the dog will WANT to give up the DB correctly and without conflict because he wants to get the reward of the ball or food. Playing prey with the DB is NOT what I would do with a dog that has any type of sensitivity or avoidance issue as yours does. This method will clear that up and still achieve the same goals without complicating the issue.
The out may be the source of the avoidance and chomping on the DB or bringsel.
I really don't like using the DB as a prey item unless you know exactly how to do that in a way that will not create any conflict. That is where I've made my mistakes in the past.
I will also use the e-collar as well, but I don't suggest that unless you have some good help.