From the picture it looks as though the ripple goes all the way to the other edge. Could that have been the fold while it was stored? The thing about pillowcase quilting is that it is distorted by the quilting and is exceptionally hard to do without these kinds of problems. I have made many baby quilts with that method and this is not unusual. So, I try and use a very plain type of quilting and stop about two inches or more from the edges. Even with that, I sometimes just end up having to rotary cut the edges off and putting a binding on.
I wish I could give you more information, but, that is all I can describe to help. The method is great for lightly straight line quilted or tied quilts, but, not so much for heavily quilted ones.