We did have this same thing happen to us.
My son was born 8 weeks early, so they sent us home without having it done. We had it done in the office at 2 months old by my OB who delivered him. He took off a ton of skin and told me he was affraid to take off any more and that it might need to be revised as he grows by a urologist.
I had the pediatrician look at it too and he also told us our son has a fat pad, that he will grow out of, but that the original circ did not have enough skin taken off. Since his body kept growing, you could tell that there wasn't enough taken off. So he advised us to have it done after his 1st bday. Which we did.
It was an outpatient surgery. They put him under and did the circ. It went completely fine. He was crabby when he came out of surgery and sluggish that day, but the next day was back to normal. Let me tell you, it was not a pretty sight down there though. We had to keep the area clean and put an anti bacterial ointment on it. It looked pretty bad for at least a week, but it didn't slow him down in the least.
I am glad we did it then and didn't wait until he was older. I am pretty sure he won't remember it. He is completely fine and normal now and is 2 1/2.