A hypopyon corneal ulcer is caused by bacteria like pneumococcus and commonly results from chronic dacryocystitis. It is characterized by a yellowish disc-shaped ulcer, serpiginous ulcer pattern, and violent iridocyclitis that can lead to secondary glaucoma and early perforation. Treatment involves topical antibiotics, cycloplegic drugs, timolol maleate if secondary glaucoma develops, and dacryocystectomy if caused by dacryocystitis.