I've been pondering a lot over this for the past few days. What follows is the result of what I've found on the subject over time plus a couple of personal thoughts on the matter. I've not been able to find actual studies on the matter so most of this can be considered bro-science at it's best. Still, I find it an interesting intellectual exercise. I hope others can contribute, hopefully with some real knowledge, so that we can shed some light on the subject, or at the very least entertain ourselves for a while.
So, it is commonly accepted that using Nandrolone entails a greater risk of developing ED than most other steroids. This is somewhat strange since ED from AAS use is mostly attributed to either elevated or suppressed levels of oestrogen and Nandrolone does aromatise so that rules out suppressed oestrogen. Anti-aromatase drugs, while they help with Deca Dick, they don't entirely eliminate the risk. Further, Nandrolone aromatises to a lesser extent than say Testosterone. All This suggests that oestrogen is not entirely the cause of Deca Dick, or else it would be worse with Testosterone and other drugs.
Another common theory is that it raises prolactin but I fail to see how this could happen. The only argument I've found in favor of this hypothesis is that taking a Dopamine Agonist (such as Cabergoline) helps the situation but I argue that this is not enough to prove that Nandrolone raises prolactin and that the DA may be helping with the ED regardless of it's cause, much like Cialis will help idiopathic ED.
An interesting property of Nandrolone is that the 5-alpha reductase enzyme decreases the potency of the drug in other tissues other than muscle, contrary to what happens with Testosterone. Many believe this interaction could be the source of Deca induced ED, since DHT is important for libido. But this only explains why taking Deca alone would cause ED and many have reported suffering from it even when stacking it with Testosterone. The addition of Testosterone would, in theory, take care of the problem because it would allow for DHT to be produced. What is seen is that Testosterone has to be dosed considerably higher than Nandrolone to avoid the issue. There must be something else going on. My theory is that either the Nandrolone competes with Testosterone to bind with the 5-alpha reductase enzyme (perhaps irreversibly, which would explain the extended period of time it takes to recover from Nandrolone use), thus decreasing the effectiveness of Testosterone in yielding DHT or that the compound to which Nandrolone is reduced (don't know it's name) competes with DHT to bind with the AR, perhaps not activating it, thus reducing the effectiveness of DHT. The first option seems more plausible to me but this is just a personal appreciation.
Lastly, we have that Nandrolone might be a progestin (a synthetic progesterone-like molecule), since it does seem to have some degree of affinity with the Progesterone Receptor. Progestins have been studied to be used as contraceptives in men, suppressing LH, FSH and subsequently Testosterone and DHT. However, this affinity does not mean that the Progesterone Receptor is being activated so the affinity might be irrelevant.
PS: pardon any syntax or spelling errors (english is not my first language).