That thermal compound shouldn't have caused any damage. Are you sure the heatsink didn't pull the CPU out with it and leave a pin behind in the socket? Because I've seen that happen...
Did you see the amount and locations of the compound? As far as I've read even if he used AMD compound it still has silver in it.
No pins left in the socket. Unfortunately, the way I got the computer he already had the HSF off and the CPU was still in the socket. It was set in correctly, but I'm not sure how he connected the HSF & bracket. The compound didn't look like the HSF was even mounted to is so he could have added more before giving it to me. It's possible he shorted it out with the bracket or damaged the CPU by running it without the HSF. I'm not 100% on how the demise of the CPU was brought about, but it really looked like the compound was the culprit.
I took the CPU to a friend of mine who runs a tech shop just to have him test out the CPU incase the MB was the culprit and it was dead. Who knows it could have even been DoA from where he bought it from.