I think that Mellor's appendage was also referred to as "Droopy Ned" at the end of Lady Chatterley. I don't have a copy any more, but I think the last line is something about Droopy Ned wishing Lady Jane good night. Where is Peter T when we need him?
We use the terms penis and vagina with our childen too. We have no embarrassment and neither do they. I don't see anything wrong with referring to them in joky terms as well though. Plenty of our language has no colour at all.
I am a little baffled though why we should need a euphemism for any part of the body. I can't think of any body part which I would want to lose(although I don't miss my appendix much, I confess).