**Core Concept**
The diagnosis in this scenario involves identifying a condition affecting the nasal cavity, likely involving an inflammatory or infectious process, which presents with unilateral purulent nasal discharge and occasional bloody discharge.

**Why the Correct Answer is Right**
The presence of purulent nasal discharge suggests an infection, while the occasional bloody discharge indicates a possible rupture of a blood vessel or erosion into a surrounding structure. In children, this presentation is often due to a nasolacrimal duct obstruction or a congenital anomaly of the nasal cavity. However, the most common cause of this presentation is a nasal foreign body, which can lead to an infection and subsequent rupture of a blood vessel.

**Why Each Wrong Option is Incorrect**
* **Option A:** This is not a common diagnosis for unilateral purulent nasal discharge with occasional bloody discharge.
* **Option B:** This is not a typical presentation for this condition.
* **Option C:** This is not a correct diagnosis for this clinical scenario.

**Clinical Pearl / High-Yield Fact**
A common source of nasal foreign bodies in children is peanut butter or other sticky substances, which can be inserted into the nasal cavity and cause an infection or erosion.

**Correct Answer: C. Nasal foreign body**