The training signals are mixed up here.

Lets clean up problem #1, the scent marked area. If you can get some NATURES MIRACLE ENZYME CLEANER get some. Place pup in his crate or in a room where he can't see you. Take water and baking soda to the marked spot. Soak the area with water, then add the baking soda to soak it up. Repeat about 3 times. Spray area with Natures Miracle. Let area dry about 24 hours. DO NOT ALLOW PUP IN THIS AREA AT ALL.

Problem #2 - Authorized potty area. When you take him out of his crate, take him directly outside on a leash and walk him to the area you prefer. Command "GO Potty". DO NOT BRING HIM INSIDE UNTIL HE DOES. This may take some time, but it is necessary. When he does go potty outside, LOTS OF GOOFY PRAISE. GOOD BOY, GOOD POTTY. Do this everytime you take him outside and be consistant.

Problem #3 - Punishment: Do not use his crate as punishment only. This is a valuable tool in training and should be related to more good things than bad. Play with him inside his crate (if you have one that you fit in), or put him in it and play with him in it. Make him relate good things are in the crates. If he requires a time out, do not mix signals. Command Kennel UP, then followed by goofy Good Kennel ups. Never state "BAD DOGGY" or use disgruntled tones after they accomplished the initial command of KENNEL UP. This is where signals get crossed. One minute your telling him to do something, so he does it, then you're telling him how bad he is for doing it.

He'll catch on. Also, take him to the vets to make sure he isn't coming down with an infection first.

good luck.