OK, so I guess that's the answer I was looking for: is it possible for a HuCard to be damaged in some way so that things like this happen?
It looks like the answer is yes, especially if other people have seen this phenomenon.
The game was brand new when I got it. One can only guess what caused it to end up like this. Maybe it was stored somewhere in extreme heat at some point during the past 17 years? We many never know.
Oh, well. Guess it's time to find another copy of Ghouls 'n Ghosts.