I also have a small lump right by the kneecap. When the PA felt it, he said it was "swampy" which I assume he means soft and rather mushy. He told me that it could be adeposal tissue---in other words, fat---or could simply be a place where a bit of swelling is poking out.
Lots of help, right? anyway, that is where swelling on my knee shows up. I ice it and it usually goes away only to show up after a hard day of skiing or biking.