My horse had pedal osteitis in both his hind feet after a traumatic accident. The way I understood it, and someone else can probably explain it better, it's where there has been significant damage to an area of the pedal bone and it has started to re-absorb itself. This can either be as a result of sepsis (there has been an infection which has rumbled on for example) or trauma which was the case with my horse. With septic pedal osteitis surgery can be an option because if the infection does not respond to antibiotics it the infected part is not removed it can be difficult to prevent the pedal bone from becoming damaged further. Surgery was not an option with my horse-the damaged parts spanned the entire width of both pedal bones about half way down. I was told it was a case of "wait and see" to determine how far the damage would spread and if his body would reject the damaged parts of the bone. I was told by my vet that horses can tolerate having up to 25% of their pedal bone removed, anything more than that is not viable as it affects the balance of the foot. My horse stood to lose about 40%-50%
My horse turned out to have fractured both his pedal bones as well as having pedal osteitis. My horse was lucky in that by some miracle he started to lay down new "bone" (although I'm told that this can't be done in the pedal bone but I'm stuck for a better description!) and when he had "replaced" the damaged parts he shed the useless bits through the holes that remained in his hooves as a result of the accident. One one side he lost about 30% so he was extremely lucky. A picture of the largest part is below!
Our story has a happy ending because he is now back in full work and you would never know that he has ever had a problem. In his first six months of affiliated dressage he has qualified for the Area Festival and we are awaiting confirmation of his winter regionals qualification.
I hope this helps, but as I said, someone else can probably make more sense of it!!