The clinical presentation and the MRI features are most consistent with parosteal lipoma compressing the common fibular nerve.

Parosteal lipomas are rare benign fat-containing tumors, comprising just 0.3% of all lipomas. Typically occur in 40- to 60-year-old patients. Clinically, patients present with a slowly enlarging, painless soft tissue mass closely related to a bone +/- nerve palsy. Complete surgical resection may be performed in cases with nerve entrapment.