Hmmm. It sounds like it might just be one of his bulbourethral glands getting excited (yes, this happens in neutered dogs too). If it's located just behind the os penis (the hard bony part of his penis), it's normal. If it goes away, it's likely this gland just getting some blood flow when he's excited. Just to be safe, I'd have your vet take a look, but it sounds like it's au naturel!