I agree, don't use the sibling as motivation, it won't work and can cause friction between them.
I don't agree with forcing him on the potty. It sounds like it's pretty traumatic for him and you. I wouldn't be surprised if the end result is him holding it as long he can, possibly waiting until bedtime to go. Then with that you have constipation issues.
I also don't agree with telling him that diapers/using diapers are yucky and something to be ashamed of. There's something holding him back from using the potty, but telling him that he's yucky or nasty isn't going to fix that. It will only make him feel worse about the whole thing. And I don't think you can expect a 3 1/2 yo to understand that the diaper is yucky, not him. My girls are a year older and still get confused on this concept.
Anyway, I feel for you. My twins trained at 39 and 41 months. In the end, what worked for us was for me and dh to completely stop talking about it. We still left the bathroom door open and the little potty on the floor, but there was no more talk of potty presents or big girl panties or anything. I didn't want to deal with a newborn and new potty users at the same time, so I completely laid off, expecting that once dd4 was about 2-3 months we would try again. She was born when they were 40 months old, so right in the middle of it. Actually, it turned out to be pretty easy. Because the girls were ready and doing it on their own it was a very smooth transition. They each had one accident when they first started wearing panties, and then a few "didn't make it to the bathroom in time" accidents since. It was nothing like what I had feared. So my advice is to lay off. Let him know that he can't go to school if he's wearing diapers, then let the issue drop. If he wakes up dry ask him if he wants to use the potty and if he says no, diaper him. No fussing or forcing, let him choose when to do it. Good luck!