The deficating while laying down could be alot of things, not all of them major. I really believe that even though he doesn't seem to have a problem getting up at 27 he most likely has some arthritis that makes it a little painful. But the best thing would be to contact the vet about it. A good general exam and some bloodwork would probably be a good idea just to see if there is something going on that isn't blatantly apparent but that needs to be dealt with.
As for the amount of hay he's getting, unless a horse is obese no one should ever complain about a horse getting too much forage. They are designed to graze on forage for 14-16 hours per day and eat 1.5-3% of their body weight in forage during that time. The more forage, the better for GI health in horses.
However, at 27 he may not be getting as much nutrition from the hay or alfalfa cubes as he did when younger and that's only going to continue to deteriorate as he gets to the age where he's out-living his teeth. Between 28-30 years of age a horses teeth run out of tooth root in the jaw to continue growing up and compensate for the daily wear that they get. This means that during this time you will start seeing teeth that are so worn down that they don't meet well for grinding. They will also just start falling out because there is no more root. This means that forage and feed that needs lots of grinding will be less effective at providing usable nutrition for the horse because chewing is a really really important part of digestion.
Most horses at this age do better if you change them over to senior feeds that are designed to be more easily digestible and to to provide nutrients in the correct balance for senior horses. These complete senior feeds do need to be fed according to the label even though it will seem like so much feed because they include the forage that the horse needs in a form that he can actually make use of. And because there is so much fiber in the feed it is not nutrient dense, meaning that you have to feed those larger amounts to meet their nutrient requirements. Then you treat the hay more as a filler to help keep the horse content. You don't necessarily have to change over right now, but if you see him start loosing weight it would be the best way to handle it. Also, having regular oral exams to make the most of what teeth are there will help you to know when a senior horse is to the point where hay and cubes are just not feasible as the mainstays of his diet due to very inefficient chewing.
Licensed Veterinary Technician