My friend was just given this old Atlas D-359. I tried to find information about it and there is none to be found. The bridge is beginning to lift and I understand this to be a fairly straightforward repair, however what is far more disconcerting is that the top under the bridge is bowed upward terribly, causing the bridge to sit at an angle. Is this repairable? It seems badly damaged to me. It is hard to believe the guitar is designed this way. I am amazed that this would happen before the bridge lifted off of the guitar because it only beginning to do that while the body looks terrible to me. Any advice as to what to do about this?

Pretty hard to see what's going on from the angle of that photo. Any chance you can take a few more?
This is the fate of many guitars. The inexorable tension of the strings tends to pull the bridge towards the headstock and the area of the top below the bridge starts to belly up (whilst the area of the top between the bridge and the soundhole sinks). Ultimately the angle of the bridge reduces the break-angle of the strings over the saddle and the guitar becomes unplayable.

Old age, alas.
Repairable... Yes, but the cost might exceed the value of the guitar by a good bit.

It may be possible to have the bridge re-glued (a bigger job than you'd think), and if the "belly" of the guitar has not lifted TOO much, then to cut the saddle down to the point that it's playable. It might be possible to get a little more room by shaving down the bridge itself... Not too much to work with there, however.
After that.... It's neck re-set. Again, can be done but this is a major repair and is normally done only for valuable instruments that are worth the investment.