I'm not sold on herbicide damage although it's possible. Rapid growth from 2,4-D or dicamba (both part of standard lawn spray) overspray causes epinastic growth which results in twisting and cupping. These herbicides are IAA mimics (indolacetic acid) which duplicate plant hormones responsible for cell elongation which is what leads to the distortion. Thing is, if it was a very low rate of drift I would expect more cupping of the leaves and leaf elongation. At higher rates, the leaves become small and stunted but the stem becomes dramatically twisted.
My thoughts are that virus is the most likely. Some of the "mosaic" viruses can cause similar growth although it is often accompanied by light and dark patterning of the leaves (in a mosaic pattern, hence the name). Aphids were also mentioned and many viruses are vectored by aphids or other sucking pests. Can't say for sure that this is the case but that's my guess based on the pictures.
Just to back this up, I spent over 10 years doing formulation chemistry screening for a major agriculture herbicide company and I am a certified crop advisor and agronomist so I'm not completely guessing. I'd say either a virus or herbicide drift. Not sure that it came in the mulch, kind of unlikely because most of the herbicides used today have very little carry-over but it's possible I guess.
If it's herbicide damage, it should grow out of it next year. If it's a virus, they'll likely die. Sorry.