Some battery brands seem to get a little squishy and that is ok, once one really begins to puff it will break the plastic wrapping as it expands, then you can think about retiring that battery. As far as cell balance goes, on a good charger, you should expect less than 20 millivolts difference after charging, but after discharge it can be quite large the lower you fly it. I have many batteries that could be as far out as 100-150 millivolts (sometimes even more if flown very low to like 3.2 or less) if flown down to 3.4 per cell or less, but as long as they balance off ok and the aluminum cell casing is not punctured on any cell I still fly them without issues. In short, I wouldn't hesitate to fly that battery if the cells have a reasonable balance and don't lose voltage over a short time like a week. I always check the batteries at 4 critical times, before I charge, after I charge, hot off the quad after a flight, and after 30 minutes to cool and recover. Those numbers will give you a good idea of when a cell starts to get too weak to keep up with the other cells.