I have a call in to the vet (this morning) and haven't heard back. So I will take that as a good sign (as he is usually pretty good about calling back).
My colt is doing really quite well even though the wound looks pretty "graphic" to me. But he is doing all his normal activities and was even kind of obnoxious/playful when I ponied him today. And although he IS swollen, it is actually not as bad as I expected it to be.
The hanging tissue in question is still hanging there, but I do think it looks like it is trying to draw back up. I'm sure it is the end of the tissue where the testicle was snipped, and it seems to have a slow drip coming from that location.
So, I pray that as it heals and he gets more exercise, it will gradually go back to where it belongs. And if it doesn't, I will harass the vet again. But I don't think there is anything immediately critical going on. Other than walking slow, he is acting totally normal.
PS. My vet told me not to work him the day he had it done. Second day (and beyond) I am supposed to make sure he gets at least 10 minutes of trotting a day.