What is wrong with my macbook and is it worth fixing?

I have a early 2008 white macbook. The last batch of the kind before the  unibody MBP came out. I have been  using my macbook for the past 5  years and it is still in great working condition with the exception of  the problem in the pics below.  The lid cannot close without the bulging  in the pics. Surprisingly, I gently use my macbook so this is a huge  shock to me. One minute it was fine the next minute the lid cannot  close.
http://imageshack.us/photo/my-images/266/x9iy.jpg/
http://imageshack.us/photo/my-images/703/vaj0.jpg/
http://imageshack.us/photo/my-images/96/itw9.jpg/
Since the macbook pretty much lives on my desk except when I travel I am still going to use it for school until it gets too slow. However, it would be nice if I could fix it

I agree it is repairable, i have a mid 2007 white MacBook and i agree that its probably repairable, the real question will be whether it would be cost effective to do this? You won't know the answer to that until you get some idea of cost. Good luck.

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