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Hello, this is Dr.Jess. I am sorry to hear about your dog! It sounds like he could be suffering from what we call balanopsthitis which is inflammation of the penis and prepuce (the skin covering the penis). This can be caused by trauma, infection, or foreign bodies like pieces of grass or sticks causing irritation. Here is an article on this problem: http://www.petplace.com/article/dogs/diseases-conditions-of-dogs/reproduction/balanoposthitis-in-dogs
I would recommend making an appointment with your vet for them to fully examine his penis (it can be difficult for an owner to retract the prepuce fully and expose hte entire penis for inspection without prior experience doing this) and prescribe antibiotics if needed. It can also be a risk for development of a urinary tract infection, because bacteria in the area can ascend the urethra into the bladder. It can also become quite uncomfortable!
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