This definitely sounds like a disturbing issue for you and your wife. My advice would be to perhaps consult with a behaviorist or two for opinions. I had one with one my dogs years ago. It was free for an initial consult and he came to my home and observed my dog and gave his thoughts and recommendations. In my case, my dog's issue was fear of men and defensive aggression if she felt trapped.

I do definitely think a trained expert observing your dog's body language and behavior might be the best bet in helping determine the best steps to take. You definitely don't want to have to feel afraid of your own dog, and you don't want to take actions that might actually exacerbate the issue.