Conditions What is going on with my piggie's butt?

It looks like a cyst or abscess or tumor, possibly originating from the grease gland. It looks more likely to be an abscess or cyst to me that is starting to rupture open. A vet is in order for this, they will likely either lance it open and clean it out if it is an abscess or cyst, or surgically remove it if they think that is at all possible. If they do lance it you will need to flush it at least twice daily with a sterile saline or diluted antiseptic solution as you will need to keep it open so it can heal from the inside out to prevent it reoccurring.

You will want an exotic vet with experience treating guinea pigs, small animal vets are not trained in the medical care of guinea pigs and can not only be a waste of money but could do more harm then good in this kind of situation.

Ditto @Soecara. Looks like an infected grease gland to me, or a ruptured sebaceous cyst. Please see an exotic vet as soon as you can get there -- that needs to be taken care of.