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I remember even more correctly that we on the forums established that they have a dick but no balls. That was pre-SoulStorm though, it seems they've done a bit of a lore-rewrite which is fine by me. As long as I get to see what's down there.
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Established is a bit too strong a word. I'd say 'theorised, based on the assumption that they piss'.
Also, my personal belief has generally been cloaca-focused.