The most sensitive part on a dog is their nose followed by their necks (high up).
Liken what might be going on to something like this:
You meet a person for the very first time and think they are great! You want to be their friend and spend as much time with them as possible. One day you reach across the table to take the newspaper they are reading. Without thinking they are instantly angry at what you did and they slap you across the face and yell something at you in a language you don't speak. You have no idea what they said but it was said in an angry tone and the slap, although it wasn't something that would leave a physical scar it makes you think twice about your decision to be their friend. The pain you suffered has since passed but you are going to be a little leery of them until you see them behaving better towards you. They will have to earn your trust again. You might even want to keep your distance for a bit since you still don't know what they said when they yelled at you but you knew they were upset and reacted badly towards you.
The good thing here is that dogs quickly learn to let things go much faster than humans do but still being cautious is instinctual until they learn otherwise.
A sure fire way to get him over the hump, (so to speak) would be to make your hands as un-scary as possible. Smear some peanut butter on your hands and let him lick it off. You will teach two things here....hands aren't so bad after all. You made a mistake! The 2nd thing going on would be to let him know that licking hands is far preferred over mouthing/biting/nipping at hands. Easily washed off as well.
