The vet just called with the pathology reports so I figured I'd update...
It was a benign mass of infected necrotic tissue. Eeeewwww.
He is still waiting for the results on the additional stains he ordered, he is thorough for sure. The in-house testing he did grew 2 different bacterias, both are treatable with Batryl so he wants to extend the treatment (currently 2 weeks) but will wait to decide for how long until the stains come back.
There isn't (yet?), and may never be, a reason for the infection in the first place but he believes with the tissue removal and extended treatment it should clear up and that will be the end of that.
It may have been from when he rubbed his head on the cage latch, that is my theory anyway. At least we seem to be getting to the bottom of treating it and getting rid of it! Yay :)