In the novel, Dortmunder tries to quit being a professional heister, and is selling encyclopedias door to door (technically, he's still stealing, since he doesn't actually represent any real company, and is just taking money for books that will never be delivered). While he's doing this, a German Shepherd belonging to one of the houses confronts him outside, and won't let him get off the porch.
I'm guessing that scene was in Goldman's original script, and was cut for time. Probably the peeing thing too, though I don't remember that from the book.
I always took the peeing thing to refer to his sister's kid peeing on him. It seemed incongruous, but sometimes when a person rants, everything comes out at once whether it's related or not to the topic at hand.