A 60 year old diabetic patient has an uneventful phacoemulsification with IOL implantation. He presented with pain, diminution of vision, redness, watering and a grayish yellow pupillary reflex on the third postoperative day. Examination revealed circumcorneal congestion, aqueous cells 4+, hypopyon in the anterior chamber with posterior synechiae and retrolental flare. The most likely diagnosis is: