Sometimes dogs can get what we refer to as 'happy tail'. This is where they wag their tail so much that they hit it on walls and furniture and it causes an injury. This looks like what may be going on with your dog. Although Diesel's looks pretty painful and like it may be infected. You could try using a topical antibiotic, like neosporin, and see if that helps. If there is no change I would recommend you take Diesel to the vet because he may need an oral antibiotic and the vet may choose to wrap the tail to keep it protected.