That's a tough one to answer, which I'm not actually sure I can honestly answer without going through it myself, but after pondering over it for half an hour or so here are some of my thoughts:
Physically, I'd like to think it wouldn't be a problem "It's okay we can just try different things." I'm sure we would find a way we could both be happy!
But losing a few inches isn't the same as never having had them!
Mentaly I think it would be totally different. I think I'd feel like a dissapointment to my wife and that I couldn't please her anymore. "She used to enjoy that but I can't do it anymore".
I would probably think my penis was pretty much useless and even if my wife tried to reassure me that it was okay, I doubt it would help ("Your just saying that becasue you have to"). When she wanted to have sex I'd think we were just going through the motions and that she wasn't enjoying it (as much at least).
If I thought it was ugly or embarrasing then I think my sex drive would be non-existant, I centainly wouldn't want anyone else to see it let alone touch it.
I love bringing my wife to climax, it makes me feel good to know she feels good, no matter how we get there (even if it doesn't involve any penetrative sex). But we have that choice.
Take away that choice (even if physcally everything was okay, but the problem was mental) and I think I'd feel very different.
Would I go to counciling, I'd like to think I would but again, it's very easy to say that when it's not happened to you. Bearing in mind (in general) us men don't even like to ask for directions, asking for help in an embarassing situation like this will probably be very difficult for him! And if he's anything like me pushing him too hard towards counciling will probably make him dig his heels in even more.
I hope that's made sense and helped you a little at least.