I'd think it is a freak accident since we've never seen anything like this. The only thing I can think of is the rotary wheel cap popping off the rotary control itself, and jamming against the joystick dust guard. I guess that could happen if you hit it square on the wheel, although it is glued down. Does the wheel look like it is pushed further into the player than before? Can it be (carefully) pulled out a little until it snaps back into place?
I'd prefer if the player was returned direct to Rio so it gets inspected more quickly, but they won't be able to refund you unless you bought it from our store. They would send out a replacement player. If you want to do that I can put you in touch with Customer Care to arrange it.
Rob