Step 4:
Now go to Filter > Distort > Polar Coordinates, and select Rectangular to Polar.
Step 5:
Now you need to decide how many frames you will want in your final animation, so that you know how many degrees to rotate each layer. Divide 360 by the number of frames you want to use to decide the number of degrees to rotate each frame. I'm going to use 12 frames in my image, so I will rotate each layer 30 degrees. I wouldn't use too many frames, as it will take more time and make the file too big. Remember that if it looks choppy in ImageReady, you can just Tween it.
Step 6:
Once you have it all figured out, duplicate Layer 1, hit Ctrl+T, and enter in the number of degrees you want to rotate the image. Center this layer on top of your first layer, so that the center circle matches up as close to perfect as possible.
Step 7:
Continue duplicating the top layer and rotating the image until you have completed the circle. Do not make your last layer a duplicate of the first. It helps to only have the top 2-3 layers visible when aligning the image, otherwise you can't really tell what you're moving.
Step 8:
Now we need to create an action to make life easier. Hide all Layers except Layer 1. Click on your Actions tab, on the window with the History and Tool Presets tabs. Click on the Create New Action Button (looks like a sheet of paper with a dogeared corner). Name it Distortion and give it a Function Key. Now click the Record button (looks like an O). Go to Edit > Transform > Distort and drag around the corners until your image looks like it has some depth to it. Hit Enter to apply the transformation and click the stop button on the Actions tab.
Step 9:
Now click the next layer (Layer 1 copy), and press your Function key that you set for the action. Do this for each layer. They should line up, but if they don't, use your Move tool to position them over each other.
Step 10:
Finally, the last step. Click your Jump to ImageReady button (Ctrl+Shift+M). Find the animation pallette, the one that shows each frame of the animation. Click the button on the upper right hand corner of the pallette, looks like a triangle in a circle, and select Make Frames From Layers.
Tips: If the animation looks choppy, add a tween frame between each Layer frame.
My final result: