How much do dogs understand in a situation?

We have a Black Lab, 5 years old, struggle to find a more friendly dog so tell me what you make of this:
When we first got our Lab we already had a little collie cross who was well into his teens. We had them together for around 3 years before, sadly, we had to call the vet out to have our little collie put to sleep. He had collapsed on his evening stroll and along with previous events we kind've knew the time had arrived.
Our Lab who, as I said, was/is one of the sweetest, gentlest dogs you could meet, always pleased to make new friends, just stood growling when the vet pulled up, we had never heard him growl before that day.
Since that evening he has numerous times been to the same vets for jabs and check-ups, never again has he growled at him, even when the old thermometer goes up his bottom, enough to make anyone growl I would have thought! Never since has he growled at anyone.
How much did he know of what was going to happen? Was he trying to protect his old chum?
Do you have any similar tales about your dogs?

 

Yes, I guess in a way dogs can understand that. I have a friend who had to put his dog to sleep. It was a sad and unfortunate story, but here's how he told it:

"I took my girl to the kennel to have her put down. Before we got out the car, she started whining and she wouldn't look at me. So I started to pet her and tell her that everything would be okay, but she wouldn't look at me and she wouldn't even kiss me goodbye. She's never done that before."

It made me cry, hearing that a dog can actually understand when it's about to be put down.

 

These two stories made me cry too, they're so heartbreaking. Fortunately I've never had to say goodbye to a dog, I can't even imagine how painful it must be. I'm sure that dogs understand more than we think, they're so intelligent.