Orphan item would mean that data integrity was unable to find item 535 in the item master file, therefore no quantity on hand should exist. Running the Rebuild would then remove the quantity on hand as this is what it sees as the error.

I always tell my clients not to run Rebuild unless they understand what it is going to do. It may now be too late to track down what was actually wrong and all you can do is correct the data by making sure item 535 exists and then posting an adjustment to put back the quantity and most likely the cost as well. You really should do this with you Adagio consulatnt in order to make sure it is done correctly and that no unrequired Ledger entry is created.