Because this is an older dog, I would be more concerned.
Blood and mucus in the stool is pretty common. It may be due to simple things like certain types of intestinal parasites (whipworms, Giardia or coccidia can cause this), an intestinal bacterial infection, or something that is more chronic, such as colitis or inflammatory bowel disease. These are conditions where the intestines become inflamed - they are treatable conditions. Certain types of cancer of the large intestines could also cause this, but luckily this is less common than the less serious causes mentioned above. Your vet will likely want to check a fresh stool sample for intestinal parasites.
Decreased appetite is just a general sign of not feeling well, so it doesn't really point us in one direction or another.
Increased water consumption can be a warning sign of several of the diseases we commonly see in older dogs, such as kidney disease, liver disease, diabetes, and Cushing's disease (an adrenal gland abnormality). It can also be caused by changes in some of the electrolytes in the blood, in particular calcium. Blood work will need to be done to help sort out which of these (if any) are present.
Lameness can be caused by things such as injury, over exertion, arthritis or infectious diseases such as Lyme disease. Because he is older, arthritis would be higher on the list than injury or over exertion. Lyme disease can affect any aged dog, but they will usually have a history if being exposed to ticks. Lyme disease can also affect the kidneys, causing the increase in water consumption.
I would recommend having him seen by your vet as soon as possible. As you can see, there are several possible causes for the symptoms you describe and some of them are more serious than others. What ever this turns out to be, getting treated started sooner rather than later is always a good idea.
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