I have a lump and an inch in diameter in the outside if my right knee right on the side of my patella. It is a soft lump that is not red or warm to touch. My knee is painful on that side and has been for the best part of a year. Almost a year ago I injured my knee and was told I knocked my kneecap out of place. Had X-ray which were negative and 6 weeks of PT that didn't help. And some form of an injection in my knee which also was not helpful. When I showed the ortho doc my lump I was told it is fine and not I worry about it.
Sorry that you are having problems with your knee.
Usually, when a patient has a subluxation of the patella (kneecap moves out of its groove), the patella will move to the lateral side (outside). This is mainly due to the anatomy of the trochlear groove (it is more shallow on the lateral side). As, a result, it is usually the medial retinaculum that is torn. The retinaculum is a type of connective tissue (sort of like a broad ligament) which holds the patella in the correct position during movement of the knee. Healing of the medial retinaculum would produce a lump of scar, but it would be on the medial side (inside), rather than the lateral side (outside).
However, it is possible that you knocked off a very small piece of cartilage from the back side of the patella (or from the side of the groove in the femur). Sometimes, these little pieces of cartilage will become stuck in the synovium (the lining of the joint). The body then produces more synovium around the cartilage, until of "boggy" lump is formed. Lumps like this around the knee are not uncommon.
Usually, if they are not causing any problems, they are just left alone. Sometimes, they can get caught in the joint with movement (either between the patella and femur or between the femur and tibia). When they get caught, it can cause a pinching sensation or pain. Sometimes, they can get caught and pinched so much that they become fibrotic (like tough scar tissue or gristle).
But, there are other causes of soft lumps around the knee. Lipomas (fat tumors, benign) are commonly seen and can even occur inside the joint or intramuscular. PVNS (pigmented villonodular synovitis) is another cause of nodules inside the knee, associated with the synovium. Meniscal cysts can arise from the meniscal cartilage along the joint line. These are basically ganglion cysts. Ganglion cysts can also arise in other locations around the knee.
If the knee is significantly bothering you, and your current orthopedic surgeon does not seem interested in determining why, seek another opinion. While a thorough examination can tell most of the things that are wrong with the knee, further imaging studies may be needed (CT, MRI, arthrography, bone scan, ultrasound, etc).