Fear aggression in my Shepard mix.

I have an 11yr old dog that is shy with strangers.
He will growl but never shows teeth and it takes him a very long time(years) to accept people. It is so hard to tell how he is going to react with someone. He will sit at a persons feet with his head down and ears back, wagging is tail, even putting his head in their lap at times. He will even let them touch his back, but if your hands or face get to close to his head he lunges and snaps.
After doing this he immediately drops to the floor and shows his belly or runs away and hides in his kennel. He is also easily frightened by fast movements, dark sunglasses, hats, all men, and new objects in our home.
I think his eye sight may have something to do with it as he has been running into doors and losing his toys that are right in front of him.
I'm at my whits end with him, he has never been aggressive with me but I cant trust him with other people.
What could possibly be causing this behavior and how do I go about correcting it?

From the sound of it, there may well be a problem with his eyes and he's reacting the way he does, at least in part, because he "doesn't see it coming". I would recommend that you have him checked by your vet or an eye specialist recommended by your vet. I wouldn't assume that his eyes are the only thing, I'd get him checked all over.

Also, assuming that your dog is OK with YOUR hands, how about you start to teach him "Touch", i.e., he touches your hand with his nose and gets a treat for his "work". Once he has the idea and is comfortable doing this with your hand, then start to get others (familiar people that he's OK with) to do it as well.

Once he learns this, he can then choose if he wants to go to the guests - and tell them not to touch his head! Let him go at his own pace.