Poor Pearly - she's turning into a bit of a woos at the moment - seems to be a bit timind with most dogs, but now she's really scared of kites, mainly the big power kites. This causes us big probs as we live 5 mins from mile upon mile of sandy beaches - very popular with kite surfers, power kits and wind surfers. We let her run in her "special field" just about the dunes as it is pretty enclosed and flat and sheltered for most views. But...she now looks for the kites and bolts when she sees them - so far we've managed to get her back to the "chicken whistle" (She gets chicken everytime she recalls to the whistle!).
My strategy is to walk her a reasonable distance away from the kites - but let her see them - whilst distracting her with the odd bit of praise now and again and bits of chicken. Play a few games to keep her attention from being on the kites etc etc. Hopefully over time she'll understand that the kites are not a problem. We've got a helium balloon in the house to stop her being scared of things in the sky - we've move it around from room to room - and when the wind dies down we'll take it outside and move it around the garden.
Poor wee mite seems to be having a confidence crisis at the moment - she was quite bold before but has become a scaredy one now.
I think your chicken whistle and distraction techniques are great and I'd say to continue as you have been. Just make sure Pearly never gets praised or attention for the panicking part.
How old is Pearly now? Fairly young as I remember so I wouldn't worry too much about her having a short period of the scaredy-cats, especially when she encounters something new and as unusual as a kite.
Ta Glendy - she's three years old - so has a few years to get a bit more laid back. It's funny though as she was a real nosey, noisy, get in aboot everything kind of dog, until she joined us. She's still a very happy soul with a whip like tail that batters everything in sight. She's had a load of trips back and forth from the VETS over a bad tail injury, plus fireworks at New Year, so this hasn't helped. One of her pals at the Kennels at Karen's was a Great Dane or a Rottie - maybe she needs a big pal?