Jules
I am sorry for the deterioration in your Dad, you haven't given very much information on which to give you any real support or to attempt to answer your primary question. So a little more detail would help. You say your Dad was diagnosed over 2 years ago, has HT been his only treatment?
You have not told us his age but I am guessing from your profile he is probably 70+ although that doesn't necessarily make any significant difference to what is happening right now.
Does your Dad live on his own and is he at home just now, If so who is providing catheter management and care?
Was he actually wanting to pee but couldn't or did he lose the sensation of wanting to pee ? Is he still mobile and able to pass his stools OK?
The confusion could be due to infection, it sounds as though your Dad was retaining urine and that often leads to a urinary infection either in the bladder or somewhere further down the Urinary tract.
The Macmillan nurse should be able to provide answers and also to help formulate a plan for what happens with your Dad next. Things may not be as bad as you fear.
My Husband sadly died of metastatic PCa in june 2014 so I have some experience of palliative and end of life care. I also work as a rehabilitation voluteer in our local hospice.
I am here if you need someone to try and give you some support.
My best wishes
xx
Mo