I think a warranty claim is in order. It might be as simple as calling them up and telling them what happened (Michelin Bicycle USA - A better way forwardŽ
), or if you bought the bike locally, talk to the shop about replacing it and see if they'll handle the warranty issue. That seems like really low mileage to develop a bulge in the sidewall. I know when I had an issue with a CamelBak bottle, the LBS swapped it out with me and they handled the claim.
Definitely don't ride it, though. A bulge indicates a weak spot in the structure. With only 600 miles, and if you don't see any damage on the outside of the tire in that area, this is definitely a manufacturing defect, IMO.