This is an absolutely classical example of an epidermoid cyst, and no differential should realistically be entertained. The patient went on to have a resection. 

Histology

MICROSCOPIC DESCRIPTION: The sections show strips of cyst lining which comprise a layer of keratinizing stratified squamous epithelium. A large amount of keratinous debris is present. The squamous cells show no evidence of dysplasia or malignancy. No adnexal structures are present. The features are those of an epidermoid cyst.