I have a 3 1/2 year old and we deal with obedience issues as well. I was at a loss on what to do until one of my friends introduced me to a certain book.
I work at Prestonwood's preschool program and one of my co-teachers last year was so sweet and patient with the dis-obedient children in our class. I asked her where she learned such patience and she told me about a book called "Creative Correction" by Lisa Welchel(sp?). I ordered that book from Amazon a few weeks ago(you can get at any book store) and it has totally changed how I parent. She says that not only should we discipline the flesh, but we need to teach their little hearts. She mentioned that she used to discipline out of fear (saying, "Obey or else", but then God reminded her that He does not discipline us out of fear...we obey Him because we love Him. She wanted to teach her children to obey her and her husband because they love her. I started using her principles which is teaching my daughters what God's Word says about their behavior and that not only do they need to obey me and Daddy but God as well, etc. My daughter has now been able to memorize some scriptures like: "Blessed are the peacemakers for they shall be called children of God"(Matt 5:9)--I use this one when she tries to argue with her sister or if we see someone arguing, etc. and "Chldren obey your parents in everything for this is pleasing to the Lord(Colossians 3:20)"--this one gets said A LOT during the day. She has also learned: "Do all things wihtout complaining and disputing" (Philippians 2:14)--I use this one when she wines, complains or throws a fit.
Now don't get me wrong, I still use time out, etc...I just mix God's Word in the process as well. After all, as Christian parents we want to teach our children to listen to God's Word and to follow His ways so they will choose to accept Jesus as their personal Lord and Savior and that they will walk with Him all the days of their lives!
I was able to teach her these scriptures from using the Creative Correction book as well as a book called "My ABC Bible Verses" by Susan Hunt. It has these small verses the children can memorize and then it has a small story about how a brother and sister named Missy and Bill apply this Bible principle to their lives.
I pray that God gives you revelation on reaching your child and I hope this information blesses you!