Hey, that's some really good info about shaking up/down or left/right instead of towards me. Thanks TinkerToy!
Our dog trainer suggests the following to be played during tug to teach dogs to use a "soft mouth":
Whenever puppy teeth bite you or your clothes, do the "Yelp!" thing.
Stop and look away from the dog for a few counts.
Then give the dog another chance.
If he/she just isn't getting it yet. Take away the fun - You. Walk away.
Since the dog is still in this mode, give him/her something that IS ok to chew on. 
I'm sure we've all learned that one. I just never knew there was a way to actually set up the situation.
Bodhi will get too excited when chewing on a cloth item. Like when I don't want to get up as early as him and he is on the bed.
Sometimes he'll bite at me through the blanket and pretend he didn't mean to:
"Yelp!"
"Oh was that you, mom? I can't tell the difference between my toy and the sheet. Umm, like, sorry."
"Yea, right, Bodhi."