Features are in keeping with a retrocerebellar communicating arachnoid cyst with mild mass effect. MRI CSF flow study shows communication with the subarachnoid space.  

Differential diagnosis is Dandy-Walker malformation, where there are vermian hypoplasia, cystic dilatation of the 4th ventricle and upward displacement of the torcula which are not present in our case. Another differential is Blake pouch cyst with which hydrocephalus is usually present.