It seems like granulation tissue which is pretty common with g-tube sites. There are creams that help, but cauterizing it is most effective. Josh had it happen too. I believe they use silver nitrite to burn it down. Even though it sounds awful, it isn't painful. It does tingle a little and is well worth it. He's never had any since (3 years). Here's what I googled:
<b>Granulation tissue can develop at the gastrostomy site and is a normal occurrence. Granulation tissue is the result of the foreign body (gastrostomy tube or button) which stimulates production of inflamed epithelial tissue. This tissue will be pink-red in color, moist, will bleed easily, and looks like the mucous membranes inside your mouth. Treatment of granulation tissue consists of chemically burning the tissue by topical application with Silver Nitrate (AgNO3) sticks. The granulation tissue has no sensation. Therefore, the treatment is pain free. It may take more than one application to eliminate the tissue, so parents can be taught the application of Silver Nitrate at home.</b>
Good luck