Sorry that your chick died. I'm hoping it wasn't Mareks, but if it was, you may want to get any other one that dies necropsied by your state vet to know for sure. Here is how to locate them: http://agr.wa.gov/FoodAnimal/AnimalHealth/statevets.aspx
Neosporin ointment is fine, just make sure there is no pain killer in it, just the plain neosporin, polysporin, or triple antibiotic ointment. Posting another picture might help keep this going with more suggestions. Has there been any drainage from this cyst?
I haven't seen that before. Could he have been pecked, and it scarred over? Maybe it is a cyst. It doesn't look like the normal swelling around an eye that a respiratory infection would cause.