I have a very noticable lump sticking out of my rear Minion SS from a hole ripped out and patched from the inside with a motorcycle patch. (should have sewn and superglued it too really) it's quite nippy on the road feeling the bump every rotation but doesn't affect handling much and once off-road it's not even noticable. DHs are quite aggresive off-road tyres (far more so than an SS) . I wouldn't have thought a 5mm bulge would be unridable off road but if you can't stand it change the tyre. I see no point when I still have 1000more miles worth of tread left and it's going to be soft going for the next 5 months anyway.
Tyres can and do deform all by themselves so if your tyre has become deformed without it being damaged by you take it back to point of purchase for exchange.
My last bike came with Maxxis High Roller II's and had been sitting flat in the box which caused a major deformation. I just contacted Maxxis and they sent me a new tire.
Is the tire seated on the rim properly? New tire or used ?
My mate has the same issue on his Hans dampf. He doesn't notice while riding. I've had no issue with mine for a the last 2 years. Not even a flat. I would change it if you notice it while riding.