I found this weird, lumpy bone in the woods. Did the animal have cancer?

Possible, but doubtful. It’s much more likely that it stems from one of two causes. First, little woodland creatures generally lead harsher lives than we do. If an animal breaks a leg, it’s not as if it has many medical options: it gets better on its own, or it dies. Healed fractures, especially bad ones, can look rather freakishly malformed and even cause normally separate bones to fuse together in a mass of bony tissue. Of course this sort of situation is not just limited to animals. On a trip to the Czech Republic, I visited the crypt of a church filled with remains of generations of parishioners (though that’s a story unto itself!). Among them was this:

You can see that many of the separate bones of the wrist and palm have fused together forming a solid mass. Presumably, the poor fellow had a crushing hand injury at some point that, upon healing, fused into the immobile, paddle-like appendage seen here. Bad for him, but instructive for us.

Alternately, a malformed bone could be the result of an infection, referred to broadly as osteomyelitis. Again, this is a nasty sort of thing and can affect the bone and surrounding tissue. Osteomyelitis can also accompany bad fractures. Here’s an example from an opossum:

Although it may be difficult to believe, these two bones are both femurs (thigh bones) from the same animal. The upper one has what would normally be considered a bad case of osteomyelitis, especially on the right half were the heavily pitted surface would have joined the knee. The lower one, on the other hand, looks obliterated.

So yes, probably not cancer, but almost undoubtedly the result of animal misery. If you feel bad at this point, you can always make a donation to local animal shelters or wildlife rescue services that deal with this sort of thing.