Final answer:
The 32-year-old hiker is diagnosed with Lyme disease, which is indicated by the characteristic bull's-eye rash from a tick bite and subsequent symptoms including recurrent knee inflammation.
Step-by-step explanation:
The diagnosis for the 32-year-old hiker who experienced an erythematous ring at the location of the tick bite that later expanded and faded, followed by recurrent inflammation of a knee, is Lyme disease. Lyme disease progresses through three stages: early localized, early disseminated, and late stage. The hiker's symptoms align with these stages, starting with an erythema migrans rash, also known as a bull's-eye rash, which is a hallmark of the early localized stage. Later, as the disease progresses untreated, symptoms like arthritis can manifest, indicative of the late stage of Lyme disease. Diagnosis is often based on a combination of symptoms and possible exposure to the bacteria Borrelia burgdorferi carried by ticks in Lyme-prevalent regions. A blood test is typically performed to confirm the presence of antibodies against the bacteria.