Personally, I don't see dwarfism, but I DO see the odd hind leg angle that some dwarfs also have.
Your horse has good bone for his height (in that it is not too heavy), so that proportion thing is there.
I don't see the nostril placement as too high, but I may be missing something, because if I look at my colt, Pyro, I think his nostril placement looks off, too, but nothing about my colt says dwarf to me.
Your stallion is probably one of the better in his height range, though as I mentioned to someone privately, the playing field is a lot tougher for those of you breeding tiny in that I truly believe there are FAR less well-conformed stallions and mares to choose from in the 28" and under height range that also DON'T show dwarf characteristics than there are say in the 34" and under range.
It is a huge job to choose breeding stock when you breed for a trait that is irrelevant to conformation (such as color or height, these things are always secondary, but an additional goal, further narrowing your choices of stock). I commend those of you doing it with honor and care, and with an open, learning mind.
Relic, I think you're wise to check your choice, and sometimes, only breeding is the way to learn. His colt is nothing I would say is outstanding, and I would probably geld the colt based on his conformation, but I don't see the colt as being a dwarf, either. It matters to me what the mare looked like, but I don't see his colt being as nice as himself. To me, a sire must at least equal himself in quality if not surpass himself, otherwise he is of no use to me in improving the breed towards a correct and aesthetically pleasing horse.
This is not judgment of your horse, because I DO like him, but do see fault in him as well. A lot less faults than his peers (other horses in his height range), but I don't see dwarf. I would hesitate to use him with a mare that showed any symptoms at all, though.
I am one, however, who maintains that height is a "symptom" in some cases (after all, dwarfism's main effect is to shorten the afflicted being's stature).
My best to you (this has been informative to me, as well as heartening that we are all looking at our horses so carefully).
Liz M.