
These occur quite often in my breed (and in GSD's I have been told). There is a very good non invasive method of removing them which avoids GA and shaving and cutting them about.
The vet opens the cyst with a needle (as they appear to have done) drain the cyst and they then use forceps to pull out the lining of the cyst, and trim this away, putting in a stitch if th cyst was large, or even using skin glue. Usually antibiotics are given. This takes care of this cyst for good, but a dog with a tendency to them is likely to get new ones from time to time. Some never conme to a head, and if small are best left alone.
I did have the method written by a US Vet owning our breed, but saadly lost it when I had computer problems.
When I recently did a search on the Net I found the method I discribed but it was trefering to thesecysts in people being treated this way, couldn't locate a veterinary reference.
Here is the site I mentioned.
http://www.aafp.org/afp/20020401/1409.html
Most vets opt for surgical excision as it is less fiddly, but it is more invasive has to have GA, and costs you a lot more, and it takes months for the hair to grow back.