We recently acquire a 3.5 year old Shih Tsu - very sweet, loving dog, but
does not tolerate being left alone. We have to resort to putting him in
a large "crate" when one of us cannot be home with him and it's seems
that over time he is having more trouble, not less.

I'd recommend consulting with a trainer or behaviorist in your area, as
well as your vet. It may be that anti-anxiety meds are called for, at
least in the short-term, while you're working with desensitizing him.

In the meantime, what is your leaving and returning routine? I've found
it helpful to make both as no-nonsense and unemotional as possible, up to
and including not greeting the dog or saying goodbye. Make it as much of
a non-event as you can.

You may need to downgrade the size of the crate (giving the dog too much
space to be in charge of can heighten his anxiety.

Third, I'd start over with desensitization. Don't leave him for longer
than he can handle, because doing so undermines any progress you make.
That may mean starting with leaving him alone for just a few minutes (long
enough to go out and check the mail?), and gradually build up to longer
lengths of time. I know that this is easier said than done, as most
people work full-time and don't have the luxury of taking time off to work
with their dogs. Your trainer may have some suggestions for how to handle
that.

Something else you might consider is that, while some dogs with SA are
helped by crating, some are not. For some dogs, crating can actually make
matters worse. Again, this is something you can discuss with your
trainer. But, how is he when left uncrated? Have you tried leaving him
uncrated for short periods of time? It just seems to me that a crate is
an excellent tool, but it's not The Answer. If it were me, I'd be working
toward the end goal of weening him off the crate.

Thanks for the reply. We've got a call into our Vet, and we're also
considering a session with a trainer my wife used previously with a
different dog (different issues). We understand the idea of gradual
desensitization, but as you note the reality of both of us working is not
optimal for our dog. My wife works full-time and is gone 9/10 hours,
Mon-Fri. Fortunately my work schedule is more flexible, but I still
sometimes need to be away for five or six hours at a time. We've tried
leaving the dog for short periods in our front patio, thinking that he might
be more comfortable with more space. It didn't seem to make any difference
though, and he did some damage, so we won't try that again until the issue
is better under control. Regarding the crate, I too would eventually like
to stop using it, but for the moment it's the only reasonably safe choice
when we have to leave him. I hadn't heard about anti-anxiety med for dogs -
that's something we will have to look into. Do you have any experience with
these?