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This sometimes happens to male dogs. Sometimes it is due to the bulbous glands in the penis swelling outside of the outer skin (prepuce). This makes it hard for the penis to return to its normal position inside the prepuce. Or the hairs of the prepuce may have become caught preventing its retraction which sounds like it might be the issue in this case. . This can cause problems if it is not corrected. You can try putting a little lubrication on the penis such as KY jelly and gently roll the prepuce back and forth and see if the penis will return to it’s normal position. I know you have tried vaseline, but you do need to roll it back and forth to try and free the hair and get the lubricant on the penis.
You can also make a saturated solution of sugar water using warm water. Mix the sugar into hot water until some sugar is left after mixing. Be sure it is not hot by the time you use it. Take a hand towel and soak it well and place it on the exposed penis. Be sure it is not too hot. This will sometime draw the fluid out of the bulbous gland and reduce the swelling allowing the penis to retract.
If the penis stays erect and will not retract using above methods, you should have him seen by the vet. The vet may have to put the dog under anesthetize to lubricate and return the penis to it’s normal position. A half inch isn't much but you can't let it get dried out that much. You can read about this here:
If it has gone back in itself or you have managed to work it back in, be sure to trim the hair around the opening to help prevent it from happening in the future. I hope this information is helpful to you and you are satisfied with my response. If you would like any additional information or have more questions please don’t hesitate to press the reply to expert or continue conversation button so I can address any issues you still have .
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Since there have been recalls on certain foods, please check the following site to be sure the food your animals eat is not affected. If it is affected, contact your vet as soon as possible. Have your dog seen if they have any symptoms.