I have a speculation:
Boy finds a dud round, previously struck by a firing pin or a completely live round - either is possible. Bullet jacket is discolored from aging except where it was inside the case.
Boy, holding bullet between thumb and forefinger, puts bullet nose on a hard surface and a rounded-point nail in the existing firing pin indentation.
Boy takes hammer or rock and strikes nail, setting off the round IN HIS OFF
The impact (or impacts) easily accounts for the deformation of the nose of the bullet and the detonation of the firing pin.
The primer is not GUARANTEED to be blown out of the primer pocket, especially if there is a hand-held nail with a hammer or rock behind it and no chamber around the cartridge to elevate pressures. Particularly if the primer is crimped. I could not read the headstamp to see if it was a military cartridge, though.
Boy, now realizes that if he tells the absolute truth is going to look like a complete idiot, so "spins" the truth to leave out the nail and hammer, making himself look like only a partial idiot and partial victim of bad luck.
Evidence needed to help support this speculation: Is the injured hand left or right? Is the boy left-handed or right-handed?
(added by edit
I also, along with SL1 and others, noted that there are no rifling marks or striations on the sides of the bullet. Even a smoothbore "zip gun" would have left some marks on the bullet if it had travelled down a barrel. If this bullet had been fired in a gun, the chamber MUST have let go immediately and probably left pieces of the (likely very cheap or homemade) gun scattered around.
I have two questions for the news organizations:
How is it no one commented on an indentation on a primer?
The article states as fact "...the 11-year-old nearly lost his hand." If the injury was that bad, how is it that he was released from hospital in less than a day?
p.s. I have sent SL1's post #24 and this post to the reporter Nick Kenney along with the address of this thread. Let's see if it clears up the reporting errors.