yeah, I had basically the exact same problem when Gonzo was younger except, he would just lay there and stare down anything that was moving past us - bikes, people, dogs, squirrels, cars, etc. First, you should try to set him up for success. Avoid houses he's really bad with and continue to work mostly on healing in undistracted areas. In areas with distraction, concentrate on getting him to focus on you before you try to get him to heel and obey other commands... a REALLY priceless command is "watch". It's one of the first things we learned on OB classes. Start by sitting with him in a quiet room inside, with a million little tidbits of cheese or chicken/liver. When he looks at you, say "watch" and give him a little treat and say "good WATCH". Trust me, after a few days of this he will constantly be looking at you. Move on to another room in the house, maybe with more activity, and reward him every time he looks and you. Now, move on to telling him to "watch me" several times during the day, when he does he gets a good treat every time. Practice it in the backyard for a while, then out in public once he becomes REALLY good at watching. "Leave it" is also a VERY good command to teach when the dog is pulling/barking at something.

meh... anyway, Obedience sounds like a total MUST, and I'm sure Jack will do great in classes! ^.^ hes a smart little Labby boy. after 6 months of going through advanced OB, Gonzo was insanely solid with distractions and he is 300% better with dogs running around him. He knows that I mean it when I tell him to watch me, so staring down everything that moves is not a problem anymore .. good luck!! Agility dogs do need to be very solid and focused on their handler with tons of distractions, so it'll be a LOT of work but it will be worth it.