Hi M......sounds very frustrating indeed. I hope my advice is helpful. A few ideas instantly came to mind after reading about your problem.
First....many children have a certain attachment to their poop, as if it is part of their bodies. As a result, they have trouble letting it go....as if they are loosing a part of themselves. I knew a little boy, the same age, who would poop in the potty, but refused to flush it away....He would completely freak out about it because he really thought he was flushing part of his own body that he would never see again. Perhaps explaining to your son that poop comes from food and not from his actual body would help him with his perspective and association with his poop and his body.
Second...When my daughter was potty training, I got a great idea from a friend that really worked. I took a plain piece of paper and wrote "Ayla used her potty today!" at the top...somewhat decoratively, but still very simple. Then i got two sets of stickers.....a set of colorful 'Stars', (the usual gold star type), and a book of 'special fancy stickers'. You might choose a boy's theme that he thinks is really cool. Whenever she tried to use her potty, but nothing really happened, I let her put a star on the paper/chart...and that gave her encouragement for trying. When she actually peed or pooped in the potty, she got to pick out a very fancy special sticker. And, I didn't let her play with any stickers otherwise, to keep them as very important rewards. I never used food, candy, or toys as incentive. Instead, she had a visual representation of her progress to look at, which was posted right on the bathroom wall for all to see....just out of her reach, of course. She was very proud of herself, and potty training happened faster than we could fill up that page with stickers! She loved to look at the page of ever growing stickers. Then she got a 'Certificate of Potty Training' when she had accomplished her goal. And, she did it for the right reasons...not just to get a treat. In fact, it worked so well, i am using a similar technique to encourage good behavior and teach her to take on responsibilites around the house. Kids love to get attention, and possitive reinforcement. With the two levels of stickers, they can't fail. They get encouraged for trying as well as succeeding.
Third.....Speaking of attention, kids will try to get it any way they can, even if it is negative. So, if he does poop in his underwear, I would not make a big deal about it, but simply take the underwear to the bathroom, put the poop in the toilet and flush it down....and definitely include him in this process. Then maybe even include him in cleaning his underwear, so he can be part of the whole picture. But don't make a big deal of it. Don't tell him he was bad or did something wrong....very important. Deal with it the same as if he spilled something, or had an accident. You could ask him what he thinks you should do with it...."Where is a better place for the poop to go?"..."Let's clean this up together."..."When Mommy and Daddy poop, we use the potty, and it doesn't stain our nice underwear.".... You get the idea.
Fourth....Children can feel empowered by having choices. Sometimes they are on top of their game, and sometimes they aren't. Try asking him each day when he is getting dressed if today is an 'underwear day', or a 'pull-up day'. That way he feels he has some control over the situation, and he won't feel as if he has failed when he doesn't make it to the potty.
And definitely continue to make a big deal when he uses the toilet/potty chair. They really love to feel proud of themselves and to know their parents are also proud of them, as i'm sure you are, and that he knows it.
I'm sure you are great parents, but i know how frustrating it can be when you are trying so hard. I hope my advice is helpful to you.....and remember not to be h*** o* yourselves either.....
Good luck,
I.