I am certainly in agreement with Dr LEE, and I would consult with another vet asap. I know this is expensive, but your dogs life could hang in the balance.
I am not sure the discharge from the penis is an indication of prostate troubles. I imagine your vet did check for a bladder infection (UTI), I had a pug once that got so many crystals it blocked up his urethra. He did not eat, vomitted, and had a discharge. Cleared right up with antibiotics, but could have been life threatening.
Please for Blue's sake, see an emergency vet.