As a friend of Tim Richmond and his family (only his sister and her children now remain) - I do know this answer. Not only do I know the answer from them, but it has been verified to me by several drivers in that picture along with one of his former crew members.
At the point this picture was taken, the HIV had already been doing a number on Tim and at times, he needed a cain to walk. He tried to play it off as a cool thing, but he really did need it. His hand is resting on a cain, not his privates.
A quote from one of the drivers to me was 'hell, had he really had the kahuna's to do something that stupid in front of all of us, a few of us would have let him have it. No matter how much we liked the guy.'
Another driver told me that at that point in time, all of their driver uniforms zipped all the way up. In order to expose himself, he would have had to have his uniform unzipped all the way in the front and he clearly does not.
Not only was Tim one hell of a racer and probably would have had a few championships had he not died, but he was a good person. He did a lot of philanthropic things for people long before it was cool like it is now. He was way ahead of his time in so many ways. You could call him a lot of things, including self-destructive, but to hurt someone else intentionally was not in his nature. Those of us that knew him, have had to deal with the pain of losing him in silence for 19 years now. With the exception of the 50 year listing of the top 50 drivers of all time, Nascar has done everything it can to sweep his memory away. I was only a kid when I knew him best, but he loved kids and took a lot of time out to talk with you. He was awesome and could drive anything you put him in.
He was a character and a lot of fun, but definately not stupid.