Well I see a little bit of his beard sticking out. Would you mind circling where you see the lump because I'm afraid I'm not seeing what you are.
Also, be warned, it looks like he's going into Dropsy mode. Dropsy is a symptom of who main things; an infection or the liver/kidney's are failing. Those organs fail usually due to prolonged use of something such as Aquarium Salt; they try to filter out the salt and end up over working themselves which causes them to shut down. This causes a chain reaction of fluid build up which then causes the scales to stick out from the bloat which we call pineconing since it looks like a pinecone. It is very rare to see a fish recover from Dropsy, especially if it is the organ failure side of things, if it is an infection you might be able to save him by using an antibiotic and Epsom Salt to help draw out the liquids, this is not the case many times though.
I just wanted you to know, I'm sorry to be the barer of such bad news :-( but there is still some hope! Here's my new treatment plan for him if you can do it! First off is to find Epsom Salt, if you don't already have it in the house you can find it at Wal-Mart or any other pharmacy usually in the first aid section. Epsom salt is very different from Aquarium Salt, Epsom Salt is used for internal issues; it's a very good laxative so it can draw out the unnecessary liquids.
Whenever using ANY salt you must always dissolve it beforehand, salt creates heat while dissolving so you don't want it hurting your fishy! I take a small cup and take some tank water, measure out my salt and mix it in that cup and then from there I slowly add a little bit every 10 minutes or so. For Dropsy you can use up to 3 teaspoons of salt per gallon so since you have a 1 gallon, it would be 3 teaspoons. However, it's usually good to start slow and build up, for your boy I would recommend 2 teaspoons since he's already quite a ways along.
Here's a schedule you can follow for him:
Day 1: add in Epsom salt and leave him be.
Day 2: Do full water change and replace the 2 teaspoons of ES.
Day 3: Leave him be.
Day 4: Do full water change and replace the 2 teaspoons of ES.
If by Day 4 you notice no visible signs of getting better or he's worse, start using 3 teaspoons of salt per gallon. Also as I said before, an antibiotic will greatly help if this is an infection. KanaPlex is very effective for Dropsy but in most cases this is not available in stores and you have to order online, so in this case if you can get to a store you can use any of the anitbiotics; Maracyn I, Maracyn II (usually more effective), Tetracycline, Triple Sulfa (do not use if you have a Sulfa allergy, or at least where gloves and a mask for protection).