J.N.
You've got a benefit in that he wants to wear undies. Make it an incentive: if he can go dry and clean for a day, he can wear the undies. But as soon as he wets himself, he goes back to diapers (or training pants).
We bought the really thick cloth training pants at K-mart, along with plastic diaper covers, and it really reduced the mess, at least outside of the underwear.
Is it possible he's not quite catching the signals that he needs to go? Poop and pee are very different body signals, and even different nerves, so he may just not be getting it quite yet.