My wife and I adopted a German Shepherd dog who did not meet the standards of A police dog. Apparently the trainers tried to get him used to gunfire at too close a range and he became extremely gun shy. Fireworks sent him scrambling for cover and every time I brought out a gun (even if it was a simple air rifle) he headed for cover at just the sight of the rifle. If the dog is behind the shooter and in an open area where the sound of the shot dissipates quickly the dog will most likely learn to handle the sound of gunfire. When you try to train a dog to accept gunfire on a small range with lots of other guns being fired and they find themselves in front of the muzzle they will often become gun shy. My Irish setter and three boarder collies never had a problem as long as they were behind me when I shot. You could usually find the german shepherd cowering in the bathtub. One of the boarder collies never got freaked out by anything but started acting freaked out during thunderstorms and fireworks because she discovered she could get extra attention and treats from my wife if she acted scared. When a coyote threatened the chickens she kept them away from the coop while I shot the coyote as it circled around the coop. I think the sound of the shot dissipated over the open land. My dad and one of his hunting partners shot at a deer from 400 yards away one year. They each took four shots at the deer before they realized they were having scope problems. The sound of their shots in the open land meant the sound had diminished enough that the deer was never scared off even though they were splashing bullets all around the buck while trying to readjust their scopes. The deer walked off without injury while the hunters scratched their heads trying to figure out how their scopes could have lost zero so quickly. I don't hunt with dogs, but If i did I would do what I could to minimize damage to their hearing.
That was rather rambling and difficult to understand. Next time try typing in paragraphs and focused thoughts.
That said there are a few points in this post I'd like to address regarding dogs and gun fire.
First off I'd like to debunk the myth that some dogs are just born gun shy. That's absolutely not true. Dogs aren't born knowing what gunfire is and being afraid of it.
That said dogs DO know to shy away from things that cause them pain or discomfort. The key is to reward them for NOT shying away when the shot is made. This reward comes in the form of a retrieve then being pet and complimented afterwards. This is how I teach puppies not to be gun shy. I first teach them to retrieve (which is a form of play for them). When they've grown to really LOVE the retrieve I then introduce them to gunfire. A shot from a distance at first (usually at least 50 yards away) and in a direction other than toward us. The pup will startle and look in the direction of the shot - just in time to see the bumper being thrown. This then starts the pup in associating the shot with something being thrown or flushed so they can retrieve it. Send the pup on the retrieve and when he/she comes back reward him/her with petting and praise.
When the pup/dog startles at gunfire it is absolutely necessary to DO NOTHING! Don't try to calm the dog with attention/treats/petting etc. Just let it pass. If the dog sees that you, the owner and leader, are not reacting to the shot the dog will in time accept that the sound of gunfire ISN'T bad and won't react poorly toward it. Instead he/she will start to look forward to gunfire after a while because it means they'll have something to go retrieve.
Now about the GSD that was gun shy - its entirely possible that the breeders of the dog had already made the dog gun shy before training OR the trainers had handled the introduction to firearms poorly. In any case I don't know of ANY dog that would run for cover the first time they heard gunfire ever. Usually it takes repeated poor reactions (left uncorrected) for that to occur. In any case once a dog is gun shy it is very difficult to train that out of a dog. It typically requires some rather tough training methods that most trainers (including myself) are not willing to utilize because its borderline animal cruelty. Of course the best way to combat gun shyness is to prevent it from occurring at all.
Regarding the deer at 400 yards and not running away; deer do not instinctively know that gunfire is a bad thing and as such they may startle at the sound but at 400 yards the sound is quieter than say at 25 yards. Unless they can actually see people at 400 yards (which if the hunters were camouflaged and/or in blinds would make that difficult) the deer would most likely continue on with their business since nothing in their DNA is telling them that gunfire is dangerous despite the fact that they might find it startling at first. That said if your dad and his friend were missing at 400 yards with a scoped rifle one has to wonder if it was the scope/gun or the shooter - especially if they could still hit their marks with said scope/gun combo at shorter distances.
A lot of hunters also forget that a gun sighted in at say 100 yards will not have the same POA/POI at 200 yards much less 400 yards. Most hunters nowadays (not including the hard core hunters or people who just like to shoot a lot then go hunting) do not have the skills necessary to properly judge distance and determine proper hold over for said distance. That's why scopes that have bullet drop a compensator and especially the new scopes that electronically determine distance, wind speed and then put a little dot on the reticle where you should be holding over at are so popular.
So again back to the point of the topic - don't go blasting away with loud guns over your dogs.