Here is what we know;
There is no flash hole in the primer pocket. The primer fired just like it was suppose to, but having no flash hole to flash through it went to the point of least resistance. It went back on itself, and it pushed itself out of the cartridge case against the bolt face, flattening itself out in the process.
The primer going off and the firing pin pushing forward had enough force to stick the cartridge case in the chamber. With the case stuck in the chamber the small amount of gas and debris from the primer only had one place to go, out of the ports on the side of the receiver that were put there just for such an event to prevent gases from a blown cartridge from blowing the receiver up in someones face.
When he realized that something was wrong with the cartridge because the gas and debris from the primer hit him in the face, my boss tried to open the bolt on the rifle. With the case being stuck the extractor would not hold and it chipped the edge from him trying to open and extract the stuck case.
When he was trying to push the stuck cartridge from the chamber the bullet was pushed down about half of its length into the cartridge case, being stopped by the unburnt powder still in the case and the nose of the bullet was buggered up slightly. The cartridge case was also deformed somewhat in all of this process, whether from being stuck in the chamber or being bumped / pushed from the chamber, we don't know.
Now I've read everything up to here and alot of people seem to just read part of the original statement I made about what happened, and applied alot of speculation.
I hope this helps clear up the event.
Bulletpusher