have you looked at little reader or any of the leap frog phonics videos? both helped my child quite a bit... especially the leap frog.
i would just keep reading to him, making sure you run your finger under the words as you read aloud. to mix it up, i might go to the library and check out about 15 board books, go through them once or twice and then get a new batch in a week or so. he might just be bored with the material.
i had luck buying board book lots on ebay, purchasing 75 board book in good condition for $10 plus shipping. i wiped them down when they came and they have been serving us well. we're reading for the next 75!
the fact that you care enough to read to him and are searching for new ways to teach tells me you are a wonderful care giver and are on the right path. just keep going!
good luck to you and please let us know of your progress,
the doc