PULL. REPLACE. NOW.
A good new battery in peace of mind alone is worth far more than the potential disaster that could be. Pretty much all batteries are made of separate cells within a container. The fact that it's bulging means that one or more of the cells is undeniably leaking/swelling, which can easily lead to such nasty things as : fire, sparks, acid spreading to surrounding areas, unstable current, shorting, etc.