Hello again, wow, so many great responses! 

To clarify, yes, we have decided to go ahead with the amputation (or "customisation" as we like to call it) and surgery is scheduled for this Tuesday coming up (NZ time). 

Most of my weeping and sniffling was done before we received more hopeful advice from our lovely vet. Our initial response to the alarming X-ray of Dot's leg was "This is a huge nasty thing in her leg, she is in pain, it's probably spread to other parts of her body, we can't face putting her through unnecessary pain for our benefit, she is nearly 10 perhaps she is old before her time, we don't believe in extreme vet treatments for pets..." and we thought we had no sensible, humane choice other than to put Dot to sleep.

However, other possible diagnoses, beyond OSA, were suggested and 4 days after the bad xray result we decided we would fight for her. The tears dried up instantly and by that stage I had read this site and realised we needed to role model confident, cheerful leadership for Dotty and ourselves. Fake it til you make it!

Here is what our vet said after getting a second opinion on the bone biopsy:

"Have just got the second opinion results back from Keith Thompson at Massey Uni Vet pathology dept (and NZ's bone pathology expert).
He concurs that as the site and radiographs are atypical for OSA, and the tissues are small and from the margins, is difficult to be definitive without larger tissues (whole lesion with margins and adjacent normal bone).  The biopsies could represent reactive bone formation at the edge of previous trauma/fracture, or a bone cyst, or be representative of an uncommon Osteosarcoma - such as Fibroblastic or Paraosteal.
I will also send this information as an addendum to the report.

Below is some information about osteosarcomas:
Ref: Jubb, Kennedy and Palmer's Pathology of Domestic Animals Fifth Edn 2007 Chp 1 - Bones and Joints by Keith Thompson Osteosarcoma This malignant tumor is the most common primary neoplasm of the appendicular skeleton in dogs and cats. In general, it is a rapidly progressive tumor with early metastasis to the lungs leading to early mortality. Most osteosarcomas arise from within bones, particularly in the metaphyseal regions of long bones, and are referred to as central osteosarcomas.
Less commonly, osteosarcomas arise in the periosteum or even in extraskeletal tissues. Two types of peripheral osteosarcoma may arise in the periosteum. One is referred to as periosteal osteosarcoma and may show similar biologic behavior to central osteosarcoma; the other is parosteal (juxtacortical) osteosarcoma, which shows greater differentiation, slower growth, and a much better prognosis than central osteosarcoma."

So that is the information we are dealing with. Basically, they need to cut the leg off to properly diagnose the problem. A bit like uprooting the daisies to see if they are growing. However, we know that Dot's leg is going to break, the bone is almost totally gone and she is in pain. We have discussed bone cementing procedures and pins but with the threat of cancer hanging over Dot and the likely pain from such procedures we have decided she will have a better time without the leg altogether.

Thanks again, everyone. Please be reassured we are not flopping about howling and weeping (anymore...) but that we are having the same nutty fun we always have with Dot, just in a less mobile way than normal! We are giving her lots of cuddles, snuggles, blobs of peanut butter on the end of our fingers (cunningly disguising a codeine tablet) and she is wagging her tail and "hurrumph"-ing and mock-growling at us as she always does.

Thanks for the virtual hugs and reassuring words. it means such a lot. 

I must upload a photo of the hound.

Victoria

It's great to have found you guys.