A distraught Papenhuyzen was carted off Suncorp Stadium in agony with seven minutes to play in the Storm's 26-0 qualifying-final defeat to Brisbane on Friday.
He was sent straight to hospital with a suspected broken ankle.
Storm general manager of football Frank Ponissi confirmed on Saturday it was "definitely not a compound fracture" - meaning the bone had not pierced the skin as he headed for the operating theatre.
The 2020 Clive Churchill Medal and premiership-winning fullback shattered his kneecap into 10 pieces in July of last year.
Friday's game was just his third NRL appearance since a return against the Gold Coast ended a 405-day NRL absence.
The gruesome nature of his latest setback prompted fears of another long lay-off, but Ponissi remained optimistic for the 25-year-old.
"Scans overnight suggest that it may not be as serious as first feared," he told AAP.
"But until he comes out of surgery we won't know."
From his hospital bed Papenhuyzen posted a photo to social media giving the thumbs up with the caption: "We go again. Love ya".
The late mishap followed a lower-leg injury to winger Xavier Coates and ensured a sombre mood in both camps, overshadowing Brisbane's dominant win that broke a losing streak against the Storm at the venue stretching back to 2009.
"I can't imagine how he's feeling at the moment," Storm coach Craig Bellamy said post-game.
"The amount of work he put in to get back to playing again, then get back into the NRL too.
"It wasn't a great night anyway, and it made it a lot worse."
Papenhuyzen was just starting to get his groove back when disaster struck.
He was making a tackle when his leg got caught awkwardly under teammate Nelson Asofa-Solomona.
Play stopped for minutes as he was carefully placed on the medicab and taken off.
Melbourne No.6 Cameron Munster was devastated for his teammate and good friend.
"I feel sorry for him. I probably saw the ankle out of the socket," Munster told the Nine Network.
"It is sad news for him and the club ... it is a bad injury run for him but hopefully he'll come back and we will see the Pappy that we know.
"We are fully behind him and I will make sure he is right tonight."
It added to the Storm's horror night that saw them listless in attack and missing 31 first-half tackles.
"Our first half was really poor; we'd done well to be 8-0 at half-time, it could have been 20-0," Bellamy said.
"I'm not sure how we can come into this game and play like that.
"We just looked like 17 players thrown together on the night and 'good luck'.
"Our attack's been humming along okay, but tonight it looked like they just met each other in the dressing room before the game."
Melbourne will now face the winner of the Sydney Roosters and Cronulla in a knockout semi-final next weekend.
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