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It's hard to tell without actually seeing a photo of the screen but it sounds like the screen is broken. Under the plastic screen is a thin layer of glass - this can break when subjected to pressure (weight on top for example) or a shock like a drop.
It is pretty common though I'm on my 2nd Kindle and 4th e-ink device and never had this happen.
Amazon are normally good about replacing units so always best to give them a call.
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