First off, I don't see how anyone could survive multiple 2-yr-old experiences. Having a 2 yr-old is birth control for me! I'm only on my second and I don't think I'd make it through another :-)
Since you have 3 other kids, you're certainly more experienced in this arena than I am, but I'm currently in the throes of toilet training my son, and it seems like I just finished with my daughter....
One thing I've learned is that you can lead a kid to a potty, but you can't make him pee in it.
I also believe that if I have to do more work and more thinking than the kid....then he's not ready. Going potty is HIS job, not mine.
You say he's ready but by the description of this potty training experience, I'd have to say he's not. Physiologically, boys typically aren't "ready" until they're nearly 3. Sure, there are kids who differ from this, but I'm speaking of averages. Also, not only does readiness involve the ability to control "output" and understand simple instructions, but also the ability to recognize the signs that he needs to go, the ability to dress and undress himself independently, and the willingness to go. It's the part about willingness to go that messes up our plans of a diaper-free existence. Since when is a 2 yr old willing to do ANYTHING? I'm met with a tantrum if I offer milk in a blue cup instead of a red one. Should I be surprised that I get resistance when I ask him to use the potty? This is reason enough to stick with diapers for a while longer and save my sanity.
Pretty much everyone I know with a boy waited until they were nearly 3, or just after their 3rd birthday, and got the job done pretty quickly. Those of us who began the process earlier spend way more time involved in it, and have way more poop and pee on our floors. I certainly did not intend to potty train before 2 1/2 with my son. My daughter potty trained right at age 2, but we had all sorts of control battles, regressions and set-backs for the next year. However, he wanted to be like his big sister, so I unwillingly entered potty-land several months earlier than I wanted. But, I've taken a completely hands-off approach this time around. Basically, we ask if he needs to go at logical times -- before sittig down to eat, before leaving the house, before bath, etc. If he goes, GREAT, he gets to put a sticker on an airplane printout (yes, we call it the potty plane...). If not, that's great too!
If he wants to wear underwear (which he prefers), GREAT! You can wear whichever pair you can put on. We give a little talk about how the underwear needs to stay dry, then be sure to ask about going potty at the times I mentioned earlier. If he has an accident, that's ok, get another pair of undies. If he wets himself because he was being defiant and didn't go potty when asked, "that's too bad. Guess we'll have to wear a diaper/pull-up for a while until you're ready to potty again."
I don't know if what we're doing is right or wrong, but we have seen him systematically progress through each stage of potty readiness over the past several months. Awareness, control, etc. Just recently, at 2 and 9 months, he can completely dress and undress himself head to toe without our help. He'll even turn around his shirt on his own if he gets it backwards. For whatever reason, this skill has brought us to a new level of potty training, where he can be dry for a couple hours at a time. It must have something to do with large motor development and independence, because a lot of our potty battles with our first child were over when she'd mastered that skill as well.
I know we'll get there eventually, and I'm trying to stay cool about the process.
As far as removing the diaper and smearing poop everywhere....ack! I've actually seen this problem discussed before on Mamasource. Seems like some good solutions were to put the diaper on backwards, use a pull-up (if it's harder to get off than a diaper), and duct tape.