Yes you are eligible for medical separation/retirement in that your condition began while entitled to basic pay. However, to get a medical retierement, your unfitting condition must be rated at 30% or more. Given that the VA only rated it at 10% and refused to increase the rating, you have a tough row to hoe it get the military to find the condition unfitting and rate it at 30%+. Have you applied for an increase since having surgury? If not, do so.
You state your received notice of DES. What does that mean? Are you being referred to a MEB?
Be aware that NG/Reserve members can be retired with 15 years due to medical disabilities. However, this retirement begins paying at age 60 vice immediately for disability retirement. See 10 USC 12731b below:
12731b. Special rule for members with physical disabilities not incurred in line of duty
(a) In the case of a member of the Selected Reserve of a reserve component who no longer meets the qualifications for membership in the Selected Reserve solely because the member is unfit because of physical disability, the Secretary concerned may, for purposes of section 12731 of this title, determine to treat the member as having met the service requirements of subsection (a)(2) of that section and provide the member with the notification required by subsection (d) of that section if the member has completed at least 15, and less than 20, years of service computed under section 12732 of this title.
(b) Notification under subsection (a) may not be made if—
(1) the disability was the result of the member’s intentional misconduct, willful neglect, or willful failure to comply with standards and qualifications for retention established by the Secretary concerned; or
(2) the disability was incurred during a period of unauthorized absence.
Mike