Well, the good news is we don't have an emergency on our hands, right now, anyway.
I found a picture on the internet similar to our problem:
http://www.horseadvice.com/horse/messages/4/319242.html
Baby's bubble wasn't as large, and it wasn't as red in color. I found it interesting at this link that the DVM mentions possible trauma from scratching against a tree, which is exactly what Baby does.
The vet said it was a "vaginal prolapse." ...apparently somewhat unusual in a young, never-been-bred horse. His advice was to keep an eye on her. It may not happen again. However, if it comes out and stays out, he said not to mess around and have her seen quickly. I asked what type of time-frame; he said with a large horse less than 24 hours, but with a mini sooner because things can get serious faster. So I feel pretty safe for now since the vet hospital has 24 hour emergency service. (My husband's been driving my truck to work and leaving his--with the legal hitch--so I could get her there in an hour or so. It's really stupid of me to have a nice new trailer and no way to pull it myself.)
He also said that if the bubble continues to appear and retract that he could do something called a Caslick procedure, where they apply a few stitches to tighten things up but still allow her to urinate. He said since she won't fit in their stocks, so he could either come out here and do the procedure or I could take her to the hospital. I don't know how serious a procedure this is; I found some gruesome photos on the internet. Not to sound heartless, if the Caslicks is necessary, my inclination is to dump her off there and let them deal with it; they know what they're doing. Does anyone have any experience? ...as in what kind of follow-up care? ...bleeding, infection risk, etc?
Either way, for my own peace of mind, I'm going to keep an eye on her for a couple days and then have her seen by the vet. I don't want to have to worry every day, that some morning I'll go out there and find her uterus dragging on the ground.
Ryan: Regarding the fence. You know... I've found that having horses involves way too many decisions; I hate making decisions. What if I'm wrong? Before we put up the electric wire, I thought about putting in a second wooden fence to make a buffer zone. But that would cost a chunk and not do too much for our property value. I could separate him further, but I really don't want to isolate him that much. Am I taking too much of a risk here? I hope not.