The appearance of findings in this case is highly suggestive of pigmented villonodular synovitis. The differential would be haemophilic arthropathy; however, this patient didn't have a bleeding disorder. 

The key sequence in this case is T2* GRE, which shows characteristic low-signal 'blooming' and should be performed in equivocal cases.

Editor's note: Per the 2020 WHO Soft Tissue and Bone Tumors Classification (5th ed.), the recommended terminology is tenosynovial giant cell tumor with pigmented villonodular synovitis no longer recommended (although remains in common use).