Hi Capt. Smelly, don't worry it's not broken, seems the former owner has 'customised' (aka messed up) all the system settings.
Press CTRL, then use the cursor buttons to find the menu option MIDI > Panel, and set this option to "Int+Midi". You should now be able to turn the knobs and alter values via the Virus' front panel.
Not sure about the PCR 500 MIDI thing, but it sounds he has customised a lot of system settings, so here are mine (navigated via CTRL menu) that might at least get you in the right ballpark:
Keyboard > Local = On
MIDI > GlobalChan = 1
MIDI > Panel = Int+Midi (as already mentioned)
MIDI > SoftThru = Off
MIDI > ClockRx = Auto
MIDI > MidiVolume = Ena
MIDI > ProgChange = Ena
MIDI > MultiPrgChg = Ena
MIDI > DeviceId = 1
MIDI CONTROL > LoPage = SysEx
MIDI CONTROL > HiPage = SysEx (not totally sure about these though, but it works)
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