Thanks for the additional information.
The first thing that I would say is that you can not learn to be 'pack leader' from watching a TV programme - Ceasar is interesting to watch and he is very good at what he does - but he is very very experienced and your friend is not him. If she/he is nervous about the dog then I would suggest professional help
Now the thing is that the owners confidence will have taken a knock from this incident so they will have to work at building the relationship back up.
Personnally I would suggest to you that you take your time and basically you are starting from the beginning again with the dog and rebuilding your relationship. It is going to be hard to get that incident out of your mind - but you must try.
The idea of letting an older ewe who is lambing sort out your problem for you may be very appealing but it is not something that can be undertaken by a novice. And just because someone says that they can do it does not mean that they can. This is an olde way - but again I personnally would be more inclined to teach a good 'watch' command and then take the dog into the shed. Let him sit and watch not paying any attention to the sheep. As he must not even look at sheep. This is a long road and you would have to work hard at it.
At the end of the day - really all you want is a perfect recall under any circumstances.
I can completely understand how hard it can be - after all I own teenage boy JRT's, whose prey drive is thorough the roof and were bred to do nothing but chase and kill.
But you can achieve it with consistency and patience
Go back to the basics and start again - what you want to initially aim at is in the house a recall even whilst he is eating.
Then into the garden - someone playing intently and a recall
Another really strong command for the dog would be 'leave' - we have a special one for certain occasions - 'Stop'
It is like to instant down at distance but I don;t care if the dog drops to the floor what I care about is that he stops dead and does not move! - taught by breaking the command down into its smaller components and then, putting it all together.
I certainly do NOT recommend hitting a dog under any circumstances.
For every one rule you knock in ,you can knock another 10 out.
You want him to respect you not be afraid of you.
The other point I would make is that from the dogs point of view
He started the hunt and you guys all run to his aid.
- it might have been better if you had all run in the opposite direction- calling and acting like loonys
but this is something that only you can make a call about - only you know your dog and what buttons he have.
Another idea is to play hide and seek wiht him - to get him to engage with you more on the walk. We tend to be quite random on our walks so our dogs have learnt that they have to stay fairly close and to keep an eye on us as we might vanish at any moment.
So I hope that I have given you some ideas and food for thought.
Keep your chin up