Ok, as Jill already pointed out, this can be a tricky one to advice on when you haven't seen the dog but here's a few suggestions that sprung to my mind:
First of all he's 7 months old - I tend to leave any retrieving to last and do all the basic like recall, lead work, stop whistle first. I've got a couple of 12 months old labs here and I've only just started with the retrieving work however, they did have the odd tennis ball when they were 4-5 months old.
So it might just be worth to take a step back and work on some more of the basic stuff, as also suggested by Matt, and this will also help in building up the confidence: you getting confidence in your dog and your dog getting confidence in you as his trusted working partner.
Also work/train in a small area - you've already done a great job by building a corridor but for now find an area even smaller like your kitchen (assuming you don't have a huge kitchen :lol: ). Sit the dog up and throw a tennis ball - don't let him run in but get the ball yourself. Always get 9 out of the 10 retrieves yourself. Although this may not seem to deal directly with your current problem believe me it all has a knock on effect.
And last but not least loosen up a bit and stop worrying about it for the moment: remember he's still only 7 months and most often the best way to solve a problem like this is not to deal with it directly but by work on another thing like the recall and then without the dog realising it you have 'sneaked' the retrieving issue in through the back door and solved that one as well.
If you feel you're getting stuck try and find some training in your area or maybe someone to train with..