The metal plating on the neodynium magnets has suffered a catastrophic failure, and in doing so has been pushed out, crunching the ribbons and covering the whole assembly with powdered neodynium alloy. Not good.
The cause of the failure is still a mystery - perhaps it could be due to a process failure in a batch of magnets, or maybe the mic was exposed to an excessively humid environment.
I have seen other mics with signs of flaking on the magnets, but nothing this serious. Neodynes are still a relatively new magnet technology, and how they will stand up to years of studio use and abuse remains to be seen.
Happily, we were able to bring the mic back to life by replacing the magnets and of course re-ribboning the mic.