Plan of action:

Get a more detailed history:  Did they actually see the injury? How long has the swelling 
been present?  Is the lameness continuous or intermittent?  Are the mare and foal turned 
out with the whole herd or individually?  Have they given the foal any medication for 
pain or swelling?  Was the umbilical cord dipped and monitored after foaling?  

Palpate distal and proximal joints in the leg- Looking for abnormalities, pain, or swelling 
in other areas of the limb

Manipulative tests on other joints in the leg- looking for abnormalities or pain

Radiographs of the fetlock- looking for fractures or soft tissue swelling
(Ultrasonography of the joint if radiographs are inconclusive or if we need clarification of 
soft tissue problems, like ligament injury)

If all other tests are inconclusive, do a joint tap, looking for bacterial infiltration.