Then I've seen a couple of horses bare their teeth and lunge. I remember at the one barn where I used to live there was a horse who'd pin his ears and bare his teeth if you walked past his stall when he was eating. It was really obvious that it was total aggression on his part.
Yesterday I was just confused and kind of frightened for the moment. There was no doubt brattiness and unwillingness involved. The rolkur-like thing he was doing with his neck, while looked pretty, was the beginning of him starting to slow down and balk. Then when I tried to make him go again was when he did the lip thing. He didn't paw or pin his ears. That I would have been able to read.
He did however, stomp hard a few times around the lunge and there was some tail swishing going on. So I know he wasn't pleased to be working.
Usandpets, that is cute that your wife's horse does that and I'd feel better if I knew it was a "nah nah" thing like tlking1 mentioned and that it wasn't aggression.
Either way, I will definitely take a firmer hand on him next time.