This seems VERY similar to what I am dealing with now, you can read through my thread:
http://www.yorkietalk.com/forums/sic...ml#post4571217
From what I was told - you need to make sure they have "superficial" and "deep" pain - superficial is pinching their skin to see if they react, and deep pain is if they respond to pinching the actual bone. Maddie lost superficial pain, and that is when I had to make an emergency trip for surgery last night...
But I WILL say that I was told by my vet and a specialist there is a certain "window" for back issues and surgery, if you wait too long there can be irreversible damage - look into IVDD in dogs. For my cocker, she had to have surgery this morning and they are saying she may only have a 50/50 chance of walking again.... so I would definitely make sure on this one. And like others have said, some are find with strict crate rest, but others have to have surgery... so sorry you're going through this.