"What you are seeing is ballooning of the foreskin. This is perfectly normal in young boys. In a newborn baby the foreskin covers the head of the penis and is usually stuck onto it. This makes sense - it is protecting the head of the penis from damage, and from contact with faeces in the nappy which could cause soreness. It is not possible to pull the foreskin back, and you should not attempt to do so.
You may have noticed that the opening at the end of the foreskin seems small. This is normal, but it means that when an infant passes urine it is natural for the loose skin at the end of the foreskin to balloon out.
As your son gets older, the opening will enlarge and the foreskin will begin to separate from the head of the penis. Eventually it can be pulled back, and he should do this at bath time to wash properly. This separation can occur at any time before puberty. In some boys, it occurs as early as 3 or 4 years of age, while in others the foreskin remains stuck to the head of the penis until the boy is starting puberty. This is all completely normal"
"ballooning" is entirely normal too, though it can be alarming to mothers and others seeing it for the first time. (In fact it is a healthy way for the foreskin to separate from the glans and for the space inside the foreskin to be cleansed.) If the baby is not in pain and the flow of urine is free, there is still nothing to worry about.http://www.circumstitions.com/Care.html
-----------------------His foreskin balloons when he urinates?
Ballooning is a normal and temporary phase of
penile development in some boys, and ballooning
disappears as the opening of the foreskin increases
in diameter. It requires no treatment.http://www.nocirc.org/publish/7pam.p...%20foreskin%22