I agree with Dr. Goldman, a consultation with an internist is needed, and you have a great veterinary school with internists in your city: http://www.cvm.ncsu.edu/vth/clinical_services/internal/
Dear ddm967,
Vomiting blood in any animal, particularly a 13 year old one, is of serious concern.
Ordinarily I would suggest, after all background lab work is completed that the upper GI tract be examined with an endoscope and biopsied. I am not quite clear that, that is what you had done from the description of using a light. Perhaps this is what you mean. In any case common reasons for vomiting blood are ulceration or tumors in the upper GI tract.
A diagnosis should be pursued. If your doctor is truly at a loss to pursue it, get a second opinion from a board certified internist. The credential is DACVIM.
Another approach is to consider whether the dog has become anemic from this bleeding and vomiting, whether the dog has adequate blood platelets and whether the dogs blood clots properly. There are tests available to evaluate all of these issues.
Good luck and let us know how it turns out.
Sincerely,
Arnold L. Goldman DVM, MS
MedHelp