What you are seeing is actually corneal melting (necrotising keratitis). Its cause is not fully agreed upon but it has been connected to a variety of diseases, including rheumatoid arthritis, PKD, and Vitamin A deficiency. There are some studies which show that certain types of NSAIDS exacerbate the condition. Treatments include topical ointments, corneal transplant and immunosuppressant drugs such as cyclosporin. There was also one study which showed the condition responding to drugs in the Tetracycline family.
The osseous metaplasia only exists at the margin -- there is no iris anymore and the lens is transparent. That is blood and pus you are seeing. We have tried oral and topical antibiotics with no difference. I do not know if the eye bothers her. She does not paw at it but she does show signs of pain; however, she has numerous other health conditions including severe arthritis in her back. I put Atropine ointment on the eye and she gets Torb twice daily.