Ann - wish I had some really good ideas for you but mostly I commiserate.
I have one ferret who also has a tendency to bite the dog.  I am quite
convinced she would like to "run him out of town".  Over a year and half
period it has gotten slightly better.  At least she doesn't stalk him as
much.  I believe sometimes now when she bites him she would actually like
my attention, is bored etc.  Sometimes its when we are playing and he is
sort of in the way "Him!  he's still here and interrupting, well he's got
to go" Sometimes when playing she lunges at him in play.  It is pretty
easy to tell the difference itsn't it?  I have not tried a squirt bottle
or anything though you could give it a shot.
 
I do what they call "management".  Dog and ferrets are never in the house
alone together, since the dog is a velcro dog this isn't a problem - if I'm
home he's glued to me and I can always see whats going on.  I am very alert
(this becomes second nature after awhile) when the ferrets get up and are
around.  I can usually tell Giesela's mood and keep an eye out.  If she
starts in on the dog I interrupt immediately.  Redirect with play time,
followed by treats, whatever.  For the dog, when she is after him I use
"Watch out" and he usually looks around and backs away as he now knows
she's coming.  Actually when she approaches him at all he usually gets up.
As he is getting arthritic I'm starting to worry about the future.  When I
go into the kitchen for treats I give the ferrets a treat and then always
follow by giving the dog one.  Its important he always gets his second so
he gets the idea they come first and its important he gets one so he thinks
they are good thing to have around.  I would also reward the dog when the
dog doesn't react by growling - i.e. verbal praise and pets, maybe treat
ferret then dog immediately.  Obviously verbally reprimand the dog when she
does growl (and the ferret too though I don't think it does much good:)
then immediately redirect everybody.  Good luck, I know I still have some
sweaty moments when Giesela really nails him.
 
Mary, Booker and Boris and Giesela (Is he still here?)
[Posted in FML issue 2553]