This sounds very bad actually. I would personally bet that a blood feather broke and is bleeding. These need to be removed to prevent infection as well as the potential to bleed out and die. You should bring your cockatiel to a vet immediately. Although some people can pull them safely I would not feel that I could do it without serious trauma and pain to my parrot.
A quick google produced this:
http://www.cockatielcottage.net/feathers.htmlYou can apply flour, a clotting agent, or cornstarch to stop the bleeding temporarily. I heard flour and cornstarch is better because when they preen it's safe to eat.
Remain calm and soothing so their heart rate is maintained at a low level.