I feel for you. My Yorkie, fourteen, has cushings disease. I've had her since she was 12 weeks old. She's my baby, one of my children. Everytime I think the vet will tell me to put her down, she doesn't. How do you actually know when? My heart goes out to you.
Take him to the vet if you trust him, and if you are in doubt, take him to another one, this poor guy is suffering so much. I really feel for him. If the vet suggests it, you might want to put him at rest so there isn't anymore pain for him. Take a day or two with him first of course. I know, that is very hard to think about, and I hate to suggest it, but it might be best for him. Hope this helps, and I am really sorry about him being sick.
Your dog needs to be examined by a veterinarian to determine the cause of his hyperesthesia (sensitivity to touch). Dog's with Cushing's disease often have secondary skin issues like allergies or infection that can lead to itching. Pain or spinal cord injury can also cause hypersensitivity when touched along the back or sides of the body--usually it does not make them itch and self-mutilate. There are also neurological causes of hyperesthesia like a stroke for example. Once a cause has been determined therapy can be started. Treatment will also include handling the wounds created from self-mutilation. To prevent your dog from self-mutilating further have him wear an Elizabethan Collar.