What is the main differential now, taking into account of the MRI appearances?
Craniopharyngioma and epidermoid cysts are the two most likely entities.
What features are against this being a craniopharyngioma?
Given the almost entirely cystic nature of this lesion, this would most likely be an adamantinomtous craniopharyngioma, which are however usually T1 hyperintense, and demonstrate some peripheral calcification in ~90% of cases. Papillary craniopharyngiomas usually are mostly solid.
Pre and post contrast scans were performed including dynamic imaging through the pituitary fossa. A complex cystic lesion is seen in the suprasellar region measuring 17 mm transverse, 13mm transverse and 16 mm AP. Internal septation and wall thickening is seen superiorly and as thin rim enhancement post administration of contrast. There is internal restricted diffusion within the lesion. The lesion markedly compresses the optic chiasm which is bowed superiorly around the lesion. There is moderate mass effect on the floor of the third ventricle and hypothalamus. The cavernous sinuses have a normal appearance.