Bulging Li-ion battery – is it an immediate danger? What’s the likelihood of explosion?
The battery may have already ruptured due to thermal runaway, meaning that despite it being bulged, pressure from boiling electrolyte has already escaped.  In this case it is also likely that the lithium graphite electrode has already degraded through reaction with air.  If this is true, you are lucky that the previous thermal runaway did not result in a fire.

However, it is impossible to say that the the battery is completely dead without more information, information that would require making measurements that are difficult or impossible for most home chemists.  Thus there may well still be appreciable amounts of flammable electrolyte and air-reactive lithium graphite remaining in the battery. If heated or allowed to react with air, any such material could re-pressurize the system, resulting in a fire or small explosion.  In awareness of this possibility, you should still treat the battery as dangerous.