Bicycle Mechanics - Reverse action derailleur on Trek Multitrack 700

My friend Ki has like a 2001 Trek 700 with a Shimano C-101 rear derailleur, reverse action. The other week he was in a bit of a fender bender and had to replace the rear wheel. When he got the new one from the bike shop he asked me for a hand getting it on. I ran the rear shifter through all seven gears and it seemed fine. But when he took it for a test ride he came back with the chain stuck between the the outer cog and the chain stay. So I pulled out the chain and set everything back into position. Dunno how it could have happened because the guide pulley doesn't go beyond the smallest cog. But the derailleur is old and maybe flimsy; is it possible that it has become double jointed and pulls in the wrong direction? Ki is afraid to shift now when he rides it and I can't properly test it for him on the road because the bike is way too small for me. Has anyone else had a similar experience with the C-101 or have any advice? Thanks.

Tell him to man up?

If the shop replaced the entire wheel, they should have checked the rear derailleur and adjusted it correctly.

Put it on a bike stand to properly adjust the RD?

Well he didn't bring the whole bike in to the shop, just the old rear wheel for them to take off the cluster and put it on a new one. But now he's brought the whole thing in to the shop to see what is the matter, it could be that the derailleur hanger is bent or something, hard to tell just by looking.

Seems like something the limit screw (properly set) would prevent, but yeah, maybe something's bent or busted.

Well I set the limit screw so that the pulley can't go past the smallest cog. Drew up the seat post to the highest and managed to get on the little midget bike and test it out a bit, but couldn't duplicate the problem shifting on my own. Ki gets back on the bike and immediately jams the chain again. Kid's got talent. Waiting to hear what the bike shop has to say.

C101 RDs are high normal so they work opposite of most RDs.