Sounds like that's exactly what happened. Scopes are made up of several lenses, and it's likely that the lens that the reticle is on (or the reticle itself, if it's not etched) came loose and rotated. You can take it apart to see how it works, but I wouldn't count on it ever being accurate again.

I've had a few Tasco scopes and currently have one on a .22 mag, and they certainly aren't the highest quality, but they get the job done for cheap. But if that gun is as nice as you say it is, maybe this is the perfect chance to upgrade it.