I'm in with jyi and le mans--I vote for some defect possibly (likely) combined with a previous front end collision. Have you pulled the forks to have a look. That may give you important clues.
At any rate I doubt you want to repair this frame. Like several others have said, 80's or 90's MTB frames can be had fairly cheap or a lightly used hybrid would give you a better riding position. It's getting to be the time of year when people start to officially give up on the New Year's resolution that prompted the purchase of their shiny hybrid. It's time to clear out that which reminds them of their increasing shame.