[dottiesyrky]

I agree with LJ above. The specialist needs to tell you exactly what the diagnosis is and what options you have. Perhaps this vet is not too familiar with the leg anatomy and issues with small dogs. Luxating patellas are fairly common in Yorkies and if the ligaments are torn it adds to the problem. Please see a specialist and you will then know what you are dealing with and whether surgery is necessary or not. Sorry to hear about poor Charlie and pray he is diagnosed and healed soon.
As for the sedation, it may just have been a mild, Valium like, sedation just to keep him very still. This is important if detail in the anatomy is to be seen clearly. I know my vet was going to mildly sedate for a dental once. No big deal, for him any way.