It's been a long time since I talked seriously about horse, but I agree with most of what's being said. First I'm confident you have located the problem in the shoulder. If it's sensitive to pressure it sure an obvious sign of pain. Since you're able to extend the leg forward and I assume back without much sensitivity I would take that as a good sign. I also think it's not navicular or related to the hoof, although can't rule out an abscess, those seem to come on all of the sudden. Which is what seems to happen with your horse, which for me rules out nerve damage. Nerve damage is usually not an "all of the sudden" problem, you would have noticed it coming on before the horse started dragging a toe. If it is nerve damage and all of the sudden it probably would have been due to an accident, which in most cases you would see a secondary injury, such as a cut or swelling.
Good luck, let us know what the vet says.