Picture would help, but obviously there is a material failure. The eyelet is usually either brass or steel. If it is brass it has less strength and greater ductility than the aluminium and so if it's distorted it likely has bent because the edge of the alloy under it has cracked. If it is steel it may have rusted and failed by itself, but the hole-edge is still suspect.

I would not use a rim with such damage unless it was
a) very minor; and
b) able to take a nipple-washer large enough to bear the load instead of the eyelet.