Ginger is correct about a limb showing atrophy from lack of use and it could be from the dysplasia. Has this been gradual or had a sudden onset?
Coukd be some tyoe of nerve damage going on.
There is a muscle disease that can cause atrophy (DM) but I am sure your Vet would have been suspect of that with exam and history.
The fact you mention that leg seems sensitive indicates something is going on.
Wish I could be of more help but you may have to consider an MRI that might show something going on that an x-Ray won't. Hard decision, I know.
Hope you can get some answers and please come back and update.
Glucosamine is sometimes very effective for arthritis, especially in older dogs or after injury etc.
But at 5 years old, and especially as no arthritis was found, it may not be that Glucosamine will help. I don't know.
Has he been checked for Cruciate ligament tear? If this IS cruciate ligament, surgery -as far as I know- is the best option.
Muscle atrophy is often caused by inability to use the leg properly often because of injury or pain etc. If he can't use the leg, the muscles will waste -and quite quickly.
It's essential the cause of this problem is found. An MRI is not cheap by any means but may be a good way to find out what's wrong. No-one can treat it without knowing what it is first.