I definitely agree with this. Time out should be somewhere other than his bed and make his bed a place he can look forward to rather than absolutely dread! I love the sheet and night light idea. Maybe even a book. However, I think you said your DS is only 2, so, that may be a little tricky.
We ended up getting a little pull out sofa that we keep in the living room and DS, whenever he is tired, just pulls it out himself and lays down and falls asleep, we end up having to take him up to his crib, but, he's not in our bed!
He did sleep with us until about 5 months ago. For a while we kept him in a pack n play in our bedroom.
Maybe at the very least, as part of a bedtime routine, take him in his room to read him a book before bedtime to get used to his 'big boy' sleep space. and if he is still in your bed at night, if you wake up in hte middle of the night, take him over to his bed so that he wakes up in the morning in his bed, and I liked the idea about putting a gate up at teh doorway too. But, i guess if he is a light sleeper, that might not work.
I would just try anything to get him used to that space in a POSITIVE way and you have to stay consistent and try something a few nights in a row. That's probably why super nanny is as successful as she is, bc she is consistent with what she does. No exceptions!
Good luck and keep us posted. We may move DS (20 months old) into a big boy bed soon bc we want to get over that hurdle before the new baby comes and takes over his crib! haha...so, i'll probably be in a similar situation soon! Good thing these kids do eventually grow up bc I couldn't take some of these stages lasting forever! haha