I would DEFINITELY listen to the vets. Dead tissue isn't just tissue that has no feeling, its tissue that has no blood supply. It will eventually turn more colors, rot, and fall off, if it even gets that far. More then likely it will cause a systemic infection in the blood and make your yorkie very very sick, and can become fatal. Again listen to the vets. You got a second opinion, which is great, and they both said to take it off. Better to lose part of an ear then a whole life.
Also i would love to know how your yorkie managed to get that tiny rubber band, which is looped 3-4 times around his top knot, around his ear as well all on his own. without thumbs i'd say its pretty impossible to undo the band enough to get it over his ear and then tighten it again so that it cuts off circulation to his ear.
I think its more likely that whom ever put his top knot in was in a hurry and didn't notice his ear was pinched in. i've seen it happen before to other yorkies, as well as getting their scalp stuck in the band.
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