It may be a sebaceous cyst/epidermoid cyst, which are common on the torso. These are benign cysts that develop below the skin and are harmless. Usually, however, the material that is expressed from them is cre***** ***** or very light and cheesy.
I do think that part of the reason it is not healing is because you have not allowed it to by manipulating it over and over. I would try to leave it alone for two weeks to see if it improves.
Sebaceous cysts do not go away completely, however. They remain as bumps below the skin.
If it continues to worsen, I would have your doctor take a look.
Here is an article that describes these cysts: take a look and see if this sounds like what you have:http://www.mayoclinic.com/health/sebaceous-cysts/DS00979
If not, I would have your doctor take a look. It does sound like some sort of cyst from what you are describing.
Feel free to ask any follow up questions you may have,
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