Two of my first quilts have this problem, at the time I thought a quarter inch seam was optional LOL. Learned that lesson quick!! Now that have pretty big holes at the seams. My son even hides things in his like it's a pocket. :) I think I will take them apart since they are just tied anyway, and put proper batting in (use the really really cheap stuff at the time), and do a proper binding (did the fold over thing since I was afraid to try anything else).
I hope you can get yours fixed though! Maybe you could whip stitch it and put a patch over the spot to protect it? Could do some sort of Applique to make it look like it was done on purpose....
Rachel