Your employer should not have issued a new W-2 for this. However, the corrected W-2 (showing an increased box 1 amount and a decreased code D amount in box 12) should agree with what was reported on your 2016 tax return since the $1,135 should have been included on line 7, not on Form 1040 line 16 or Form 1040A line 12.
Because the return of contribution was made after April 15, 2017, the distribution of the excess deferral is subject to taxation on your 2017 tax return and amounts to double taxation of the $1,135. This is effectively the penalty for not receiving the corrective distribution in a timely fashion. The Form 1099-R should show this as a regular distribution (code 1) and is therefore also subject to a 10% early-distribution penalty.
If the plan mistakenly reports this distribution with code P on the Form 1099-R instead (signifying that the return of excess was returned before April 15 even though it wasn't), the "corrected" W-2 is wrong since the code P Form 1099-R, reportable on your 2016 tax return, already results in this amount being taxable. The IRS will see the "corrected" W-2 and expect $1,135 to be added to line 7, but the IRS will also see the code P Form 1099-R and expect another $1,135 to be added to line 7.
