This is something that Li-Ion batteries can do over time. I am not sure as to the chemics that causes this. But the end conclusion is: this is not repairable. The device can be repaired by replacing the battery, but the battery itself is not repairable and should not be used.
A battery that is swollen has a higher risk of ignition. At one time I had an EXOPC/WeTab (Google it if you like to know what it is) with a swollen battery. I have put it outside the house until I found the time to throw it out.