Play more KSP. You learn pretty quick "just because it's going up, doesn't mean it's going to stay there."

Yeah, hard bounce off the atmosphere trades angular momentum for radial velocity and increases eccentricity, meaning next time you hit the atmosphere is gonna be even worse.

Possibly an eccentric orbit.

AFAIU it doesn't go up, per se. Because our planet is not a perfect sphere, but rather one that is squeezed on the Poles, its actually the planet distance itself longer while rotating..

There's only a 31km difference between the "lowest" and "highest" surface point on earth so I doubt that's what's going on here. More likely is its orbit eccentric and while it seems to go up it continually loses speed due to the atmosphere slowing it down and its average altitude keeps going down continually (although obviously more when it's close to the periapsis, the point of closest approach).

Could you explain that figure to me please? Everest isn't nearly that high, so are you starting at the bottom of a trench? Surely the meaningful low point is the lowest point (be it the sea or some other low point) that the inbound fiery ball could hit?

The earth is not spherical. The diameter of the earth through the equator is more than the diameter through the poles, because of its angular velocity. See http://en.wikipedia.org/wiki/Figure_of_the_Earth