According to some traditions it is an actual physical bump on his head, meant to be a sign of enlighenment, called an ushnisha. However I read that in the earliest representations it was probably simply a topknot, and that is later got interpreted as something else. Does anyone know about that?
Re, the Greek influience theory, I can't remember seeing any Greek statues with topknots, or, for that matter, the curious texture consisting of lots of little balls that his hairstyle often has. Not saying there weren't any, but it doesn't strike me as typical.