Distributions from a 401(k) are not subject to the one-rollover-per-year rule. The one-rollover-per-year rule only applies to 60-day rollovers of distributions from an IRA to another IRA of the same type (traditional or Roth).
As long as it has been less than 60 days since you received the distribution from the 401(k), you can roll the distribution over to a traditional IRA and continue to defer the taxes. To complete the rollover of the entire distribution, as VolvoGirl said, you must substitute other funds to make up for the portion that was withheld for taxes. The amount withheld for taxes will be combined with all of your other withholding from other sources as a credit against your overall tax liability and you will receive a refund of any overpayment of withholding.
