How do I control flies in yard from puppy?

Congrats! Puppy poo is the pits.

You are doing most everything you can right now. I wouldn't spray any repellent anywhere, dogs (especially puppies) like to eat the grass even when they are not sick. Aside from creating a diversion for the flies (like tying a piece of meat to a tree limb somewhere far from you) I think you'll have to live with it until he starts making solid stools.

As far as the poop being runny, you may have to change his diet, or take him to the vet. It should be small, not runny.

But flies will still be attracted, so start growing Marigolds at different spots in your yard. I found that bugs can't stand the "smell" of them. This is VERY eco-friendly as well. Just make sure the dog can't get to them.

Get another dog

diatomaceous earth. safe and effective. my friend uses it in his stalls on his cow farm.

http://www.naturesbalancecare.com/

Animal safe fly spray...

You could also put up those fly traps...