Could he be referring to a periosteal (often an intermediate grade tumor) or parosteal osteosarcoma (usually lower grade), as those that can occur in humans?  Both are not that common & a bit difficult to diagnose. 

I did have it slightly wrong.  It's parosteal osteosarcoma.  I got a copy of the biopsy results today:

Microscopic Description:  The sample represents a neoplastic proliferation of chondro-oseous and fibrous stroma.  It is a moderately cellular lesion, populated by fibroblastic type spindle cells, chondrocytes, and osteoblasts.  There are islands of pale staining fibrous stroma, which transitions into lobules of immature hypercellular cartilage, which then transition into spicules of osseous matrix.  The proliferative cells are generally large, with a large oval or rounded nucleus and fine chromatin and attenuated cytoplasm.  There is not a high degree of atypia of pleomorphism.  Mitotic activity is rare (<1/10 HPF).  Cartilage and bone lacunae are large and irregularly spaced, and occasionally occupied by more than one cell.

Diagnosis:  Left medial proximal tibia - Parosteal osteosarcoma.

Comment:  The clinical and histologic features are consistent with parosteal osteosarcoma.  These tumors demonstrate slow, but continuous growth on the surface of the bone.  In time, the tumor may acquire a more aggressive clinical behavior and will invade the cortex and will extend into the medullary cavity.  Pulmonary metastasis may occur, but only many months after the clinical disease first becomes apparent.

Also:  The radiology report on Buddy's chest xray states:  "Significant thoracic abnormalities are not identified.  There is evidence of spondylosis involving the lumbar spine.  Metastatic neoplasia is not identified."

I am now going to go look up "spondylosis".

The onconologist says there is a real chance of a cure...  I hope, I hope.  Any experience out there?