CAESAR II (as well as all other pipe stress programs) assumes that the pipe is linearly elastic, which means that will not calculate an accurate measure of the real stress state in a case where gross plasticity exists. If you recall the stress-strain curve with the straight elastic portion, then plasticity (with continuously changing stiffness) and failure, in CAESAR's methodology, the linear portion is extrapolated indefinitely, no matter whether the material is actually yielding or not. Therefore, CAESAR's linear approximation of stress can be much higher than the true stress state (as it is in your case).
In addition to this inapplicability of the program, with gross distortion of the cross-section, there are changes in flexibility of the piping itself, which will typically add to the over-estimate of the actual stress level present. CAESAR does not adjust stiffness to accomodate any ovalization of piping. This effect is more pronounced for larger diameter, thinner walled pipe.
To acheive an accurate numerical prediction would probably require non-linear FEA.
You may be wise to consult with an expert in materials and failure analysis (accurate assessment may best be done by other means).
Or maybe you can just replace the pipe & fix the support problem?