I have a 4 year old Lab and he had swelling around his penis and a little around his testicles which started when he was about 2 I took him to the vet and he said that it was just like a young boy going into puberty. He was going through the change! But since your dog is 8 years old I really can't say thats what it is unless he is going into menopause!! :) LOL But really you would take him to a vet because that sounds painful and needs to be looked at.