If it has been working ok, then maybe it's fine. But if you would like to have more time then you can return it and tell the store that you're not satisfied since it was banged up. Then get another one. But do take note that just because a box is banged up, it doesn't always mean the product is broken. Of course it's not always good to take any chances especially on something expensive such as this. So my advice would be to return it to be on the safe side.
To upscale, hook the player up via HDMI and set the resolution to 1080p, 1080i, or 720p. These players will not upscale using Component.