Yeah, I would take the PS2 and game disk back and tell them what happened. A scratch like that all the way around the DVD would almost be impossible to make on purpose or by simply mishandling the disk, so they can\'t claim it\'s your fault. That round scratch was from something inside the PS2 (maybe the optical head?) that touched the disk while it was spinning.
If you use the PS2 in vertical, I\'d make sure to have a nice, stable stand with it. And it probably needs to be on a stable surface. Thick carpeting would not be good.
Hope that helps.