First, honesty is always the best policy. Aviation is a very small community and someone does know about the original oral exam.
That being said:
1. Request a copy of your training records.
2. Review your training records to see how the first oral is disposed of.
3. If it does state failure and then retest, write a paragrapgh explaining the issue based on facts only....and keep it as a reference for future job openings.
Remeber: PRIA will follow you for 5 years.
AND, I have heard of a story (or two) where someone was pulled out of ground school because of an issue with respect to the application, i.e., misrepresentation. Almost every application states that any falsehoods is immediate dismissal.
Be cautious and take the higher road. Sounds like your career is just beginning!!
Give it a few months and order your pilot records from the FAA.
Airmen Certification Branch, AFS-760
PO Box 25082
Oklahoma City, OK 73125-0082
Send it a check for $10; it will refund the excess if it costs less than $10 to copy your file. See if this event is in your FAA file. At least you will know what it is in your file and what others can find out about you. You can see if the FAA regards your oral as a bust. Then, you can formulate an appropriate answer.
For what it's worth, I busted an oral and the examiner issued a pink slip. I came back a couple of days later, coughed up another fee, passed the oral and passed the flight, such as it was.
Of course, under PRIA, training busts can be uncovered.
Pilot Records Improvement Act of 1996. Here is a link to FAA AC 120-68 which details the rules. It came from the Airmen Certification web page, which has a lot of interesting information on the rights and obligations of those who hold an airman certificate.
I second FL000. Go download the AC. You'll need Adobe. There are things on page 2 that discuss pilot notification of PRIA inquiries and opportunities to correct records.
My .02 opinion is every pilot should order a copy of his/her FAA record and, for that matter, driving records, credit records, etc. Obtain every possible document that others can obtain about you. That'll help level the playing field come app and interview time to help you answer questions appropriately.