I removed something very similar to this from my buff orpington rooster tonight. It too was big..there was a black horny substance sticking out kind of like you describe, and then I gently worked it out, surprised that it was so big. It looked like it had dry pus on the back of it. I managed to work it out with my fingers but my otherwise healthy rooster had this issue going on.
I would enclose photos of of what I took from Big Mike if I knew how. A theory that I have is that he's always getting into scuffles with the ducks and other chickens and perhaps this was a scab that tunneled...at first I thought he may have had a piece of rock embedded..but I know it poked out the skin in two sides...he didn't seem to mind me taking it out of there...I put some Neosporin in the holes it left in there...and he went on his merry way.
I don't detect an odor with it, but it is yellow on one side and it looks like dried pus. It has the texture and consistency of a dried fungus or maybe a piece of sinew. It did not bleed when I removed it.
I wondered the same thing regarding cancer...I plan on taking this to a vet to have her test it on Monday and see if she can shed some light on what it is and then it will depend on how I deal with the rest of my flock. I currently have sixteen chickens.