If there is less inflammation, the cholesteatoma may present the appearance of semolina discharging from a defect in the tympanic membrane. The posterior and superior parts of the tympanic membrane are most commonly affected. If the cholesteatoma has been dry, the cholesteatoma may present the appearance of wax over the attic. The attic is just above the eardrum. If untreated, a cholesteatoma can eat into the three small bones located in the middle ear (the malleus, incus and stapes, collectively called ossicles), which can result in nerve deterioration, deafness, imbalance and vertigo. It can also affect and erode, through the enzymes it produces, the thin bone structure that isolates the top of the ear from the brain, as well as lay the covering of the brain open to infection with serious complications (rarely even death due to brain abscess and sepsis). Both the acquired as well as the congenital types of the disease can affect the facial nerve that extends from the brain to the face and passes through the inner and middle ear and leaves at the anterior tip of the mastoid bone, and then rises to the front of the ear and extends into the upper and lower face. Cause
Cholesteatomas occur in two basic classifications:  Acquired cholesteatomas, which are more common, are usually caused by pathological alteration of the ear drum leading to accumulation of keratin within the middle ear. Congenital cholesteatomas are usually middle ear epidermal cysts that are identified deep within an intact ear drum.
If the disease is difficult to remove, so that there is an increased risk of residual disease, then removal of involved ossicles in order to fully clear cholesteatoma has generally been regarded as necessary and reasonable. In other words, the aims of cholesteatoma treatment form a hierarchy. The paramount objective is the complete removal of cholesteatoma. The remaining objectives, such as hearing preservation, are subordinate to the need for complete removal of cholesteatoma. This hierarchy of aims has led to the development of a wide range of strategies for the treatment of cholesteatoma. Surgery
The variation in technique in cholesteatoma surgery results from each surgeons judgment whether to retain or remove certain structures housed within the temporal bone in order to facilitate the removal of cholesteatoma. This typically involves some form of mastoidectomy which may or may not involve removing the posterior ear canal wall and the ossicles. Removal of the canal wall facilitates the complete clearance of cholesteatoma from the temporal bone in three ways: 

It removes a large surface onto which cholesteatoma may be adherent;
It removes a barrier behind which the cholesteatoma may be hidden;
It removes an impediment to the introduction of instruments used for the removal of cholesteatoma.Thus removal of the canal wall provides one of the most effective strategies for achieving the primary aim of cholesteatoma surgery, the complete removal of cholesteatoma. However, there is a trade-off, since the functional impact of canal wall removal is also important.