So, was shooting a comparison video today for an Arsenal and Century arms AK. Something happened to the Century. On the third shot there was a small explosion back into the receiver of the gun, which shot the firing pin out of the housing and into the gun and bent it like a J.

I caught it all on video here:
Video Here

I'm not sure what the happened. Was it a bad primer, or was it the firing pin driving too hard into the primer? Have you guys seen something like this?  

Sounds like a pierced primer.  Could be a number of things like a weak or high-seated primer, or excessive firing pin protrusion.

The primer was definitely pierced. It was the only primer that was out of the batch of 3 I got off, but I'm just shocked it produced enough force to blow the firing pin past the retainer pin.

First thing to check is firing pin protrusion - general max is .060".  An out-of-spec firing pin is the most likely cause of a pierced primer.

Peak chamber pressure is in the neighborhood of 50k PSI, and all that pressure venting through a pierced primer onto the firing pin turns it into lil' mini-piston, easily breaking most any firing pin retaining pin if it gets a good seal to make a good, hard push against it.  Thankfully it wasn't a bigger breach that could have blown up the bolt or the entire gun.