Thank you Adam,
Now as I noted, we'd not expect this to be related to his castration three months ago. Still with this behavior arising after the surgery and the lack of signs of skin based irritation, one does have to consider whether this is a reaction to an allergy/inflammatory issue (as it is most commonly) or if there is something more amiss. Now the lack of response to the steroids does suggest that we do have to consider those less common issues and those that that could be playing a role here is stress/anxiety, nerve based pain, or as a habit type behavior.
In regards ***** ***** this situation, if he has been kept on monthly flea treatment (to rule it out as playing a role) and has not responded to the steroids (which should have helped even if the allergen trigger was still present), then we need to think about ruling out those other concerns via treatment trials. The first step would be to speak to his vet about a trial on nerve based pain relief (ie Gabapentin). If it is just an intermittent discomfort, this could reduce it enough to break the hair pulling cycle.
Otherwise, in regards ***** ***** other behavior based issues, these can be harder to diagnose since we cannot talk to our cats about what is motivating them. Still we can try de-stressing treatments (ie Feliway, Kalmaid, Zylkene, cat specific anti-anxiety medications, etc) combined with preventing access to the tail (ie buster collar) to break any habit. With addressing the behavior side, we do often rule out the other issues first, since this tends to be the differential that take the most time, treatment modification, and patience to uncover the root of the cause and address it for Sid. And often we would benefit from a behaviorist being involved if we did need to go down this avenue of treatment. So, hopefully we'd see a response to ruling out nerve discomfort, but if not then this would be our next point of call.
Overall, there are a range of reasons for a behavior of this nature. Still with his lack of response to treatment so far, lack of skin changes, and lack of other allergen exposures (ie diet change, powders/chemicals in the house, etc) to fit these signs, we would need to start to consider these less common issues for his signs and take the above approach to Sid's situation to see if we can stop this tail overgrooming for him.
I hope this information is helpful.
If you need any additional information, do not hesitate to ask!
All the best,