First thing to realise is that target panick happens to all of us. I've had it, recovered from it, and had it again. Every once in a while that brain of ours likes to make things harder than they are. You may get frustrated, but don't give up, you'll get over it.
One of the most popular way to overcome target panick is by practicing with a back tension release an blank bail shooting. Blank bail shooting is standing faily close (~10yds) to a taget with no spots or no destinguishable aiming points. This allows you to concentrate on the shot without having to worry about aiming. Work on follow through and all the other good stuff that goes with the release of the arrow. Once this process becomes a sub-consious action then you can throw aiming into the picture.
One thing that has helped some trigger shooters I've worked with is by just shooting with a back tension for a little bit. Get a back tension release and shoot it for about a half hour or so. Then put your trigger release back on and see if there is a difference. My experience is that shooters feel more in comfortable using their trigger after practicing with a back tension for a bit.
Any others have any insight? Lug nut, what are your thoughts?