Join Date: Sep 2009
Location: Tampa Bay area, FL
Well is the swelling soft and pliable, or is it hard? If its soft, it could be some sort of edema (blood pooling) but if its harder, I'd be more inclined to say he's allergic and its something like hives. Is he swollen anywhere else? If he really were allergic he'd be swelling pretty much anywhere the bedding were to touch him, like his legs and probably the rest of his belly and some of his side, not just his sheath area. Have you had a good look at the skin where its swollen? It should look red or irritated and will probably be warm and/or broken out.
Have you called the vet? If nothing else, he'd probably stick a needle in the are and see if he gets blood or another fluid to make a final diagnosis and then give you an antihistamine or something. I would see if getting him on another probiotic (I use Optizyme, its like 20 bucks for a bag that lasts almost 3 months) would help the situation if you don't have money for a vet visit.
Just a random observation, why isn't he turned out every day? IMO that's not very healthy, and it could also be blood pooling because he doesn't have enough opportunity/space to move. Since you said it goes down with turnout and moderate exercise, I'd say that's also a pretty viable option.