The scar on my upper lip is hard, painful and puffy. What can be done? (Photo)

Don't despair, the scar can be improved.  I would likely start with injections of intralesional Kenalog.  Laser treatment might also help.  It is also usually helpful to massage the scar at home.  You should go back to see your Mohs surgeon to be evaluated in person and make a treatment plan.  

I understand your frustration.  It appears that you have hypertrophic scarring of your incision, meaning that it is raised and firm.  The best treatment for this are injections of steroid which will soften it over time and help it to flatten.  It will likely take multiple injections spaced about 6 weeks apart.  This should improve your result; however, if you are still not happy with the result a scar revision could be performed under local anesthesia.  I would recommend that you see your physician who performed the procedure.  They should be able to help you.Best of luck,Cody Koch