I have this problem to it seems to be happening to men more and more. I truly believe it is the side effect of all the GMO's in the food now.
Enema with a slightly diluted hydrogen peroxide (about 2:1 water:h2o2) and drink some water mixed with golden seal.
From what you described about your husband's penis, I can absolutely tell you that my penis does the same thing so he is not alone. Except a little more than half of my penis stays retracted, and when I do the things your husband does like exercise or get nervous it retracts a little more. The only time my penis is really fully out so that you would know it's full length is when I get an erection.
A related discussion,
Anyone with penis retraction was started.
You should visit steady health , topic: penis shrinking to almost child size when exerzising. Just search google. There is a lot of information there. I have the same problem :(
I have suggested jumping on your buttocks. This is from yoga postures to arouse kundalini. One person had posted a message that he solved 18 year problem by chance while jumping on his buttocks. You may try this technique. You may not have to learn yoga to do this technique.It is completely harmless technique.