Sorry this is so frustrating but yes, the dose seems too low.Have you seen the PZI protocol?
As it states, hold the dose 3 cycles and up by .25 or .5 depending on how high the number is. I would increase by .5 and monitor for midcycle numbers. So I'd go up to one unit or 1.2 and watch him. If he is still too low after 3 cycles, increase again.
It could be that PZI isn't just not going to last long enough for him and your choice will be to dose 3X a day or go to another insulin. I'd try a higher dose and reevaluate. He does seem to bounce too, but I definitely think he needs more insulin.
Are you sure getting ketone tests at these higher numbers?