>I was trying to keep the ISO down, so set the SS to 400. What >settings should I have used ?
I realize the emphasis of the discussion is focus, but I think what you ahve is motion blur. 1/400th of a second is too slow at 300mm with something moving that fast.
Look at the water drops, some are frozen, but those are not moving fast. Look at the big one to the left of the nose, and especially in the top right corner the tiny ones. Those tiny ones are too small to be oblong globs, they are just motion-streaked. While the dog isn't moving that fast, he is moving fast enough that he's blurred.
Go look at the sports forums, where people are shooting volleyball, soccer, etc. They will tell you to shoot at least 1/1000th or faster for humans, and I bet your dog is moving faster.
The camera has really good high ISO performance, go ahead and crank it up, the fast shutter will freeze the motion and the noise won't be bad. Or reduce the aperture as well if you want to keep it down, you can still get an in-focus head.