I pulled my Phantom 2 from the closet after leaving it unused for over a year. The battery was in the craft. I removed the battery and noticed that its gray side walls (long rectangles containing warning text) are slightly puffed out, to the point of extending about a millimeter beyond the white plastic outer body. They're a little springy, too.

It's been so long since I saw the battery that I no longer recall if this is its normal condition.

I pressed the battery test button and all 4 green LEDs light up.

Is it safe to use?

Hello Trwalp, it's not recommended to use the battery with a a slightly bulging, which is no safe and we could not guarantee the performance.
Please check some more info here: http://dl.djicdn.com/downloads/p ... fety_Guidelines.pdf

Thank you for replying, DJI Natalia.

Certainly don't use it to fly.  Indeed I would go one step further and dispose of it safely at a recycling centre.  Meanwhile get it out of the house as a precaution until you get rid and I don't mean in the garage.  It is now a potential fire hazard.

Fly safe.

Galaxy Note comes to mind......

Ditch the battery (in a proper manner) , it is not worth the risk.