1. Most commonly used as an insult, parodying the more infamous hung like a horse and its ilk (hung like a donkey, hung like an elephant, hung like a sperm whale, pack of wolves, hung like a, and etc.) implying that a man has a small penis (a.k.a a rice dick or mouse cock). Often used in conjunction with a parody of sly like a fox, switching the names of the animals. Could be substituted with "hung like a shrew", since shrews have the smallest penises in the animal kingdom (.2 inches / 5 mm).
2. Far less commonly used as a compliment (I’ve personally only heard in once) perhaps an indirect reference to kinky fox sex, box fox, or pocket fox. However, after having done some research, I would like to point out a more direct interpretation:
First consider an average gray fox, about 1 foot high at the shoulder. Let’s give him a modestly interpreted 4 inch long cock about 2 inches in diameter (10.16 cm and 5.08 cm respectively). (The knot (see dog knot) is being discounted for the purposes this exercise)
Next, take Goliath the world’s largest horse, standing a large 19 hands and 1 inch at the shoulder (probably packing a huge horse cock/horsecock of his own).
Now if you increase the fox to Goliath’s size he (the fox) would have a cock 26 inches long and 13 inches wide (approximately). That’s over 2 feet long and more than a foot thick (66.04 cm and 33.02 cm respectively)!
Then let’s make our fox the size of an elephant (10.5 feet / 3.2 meters). That would give him a dick 42 inches in length and 21 inches wide (3.5 feet long and almost 2 feet wide, 1.06 meters and .53 meters respectively), certainly comparable to an elephant cock/elephant dong.
Finally (since you all must be getting sick of this), we’ll make the fox the size of the largest animal on earth today: the Blue Whale. Scientists know that blue whales grow to be about 80 feet long, but because their erect members can only be observed during mating they can only guess at that size (Wikipedia says about 2 meters, but the entry Whale Cock (Dork) says otherwise). In any case, if our fox was the size of a blue whale its cock would be an immense 26.67 feet long (320 inches / 8.13 meters) with a massive girth of 13.33 feet (160 inches / 4.06 meters).