You know, I think I have to correct myself, I don't think you've got Phrynosoma hernandesi, I think you've got the pygmy horned lizard there, Phrynosoma douglasii (formerly thought to be a subspecies of P.hernandesi).
Personally, I think you're doing the right thing to let him go. Just make sure you're putting it back in the proper environment from which it came from.
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