I have a resistor in an analog VOM meter that I suspect is bad. It is
exclusive to the 1x ohm scale, which is now reading as if it were the
1000x ohm scale.

The color bands are as follows:

Red
Grey
Violet
Gold
Red

There is a larger space between the gold and red bands than between any
other adjacent bands.

.... and it is of this type:
http://upload.wikimedia.org/wikipedi..._Resistors.jpg

I read this as 280,000,000 ohms with 5% tolerance and 50 ppm temperature
coefficient, but when I use a digital meter to read the resistance it
comes in at 270,000 ohms.

I noticed a small hairline crack in this resistor and when I poked it
with a pin a small flake of the outer coating fell off.

280,000,000 ohms seems like an awfully large value to me. Could this be
a correct reading?

Thanks