Is this just simply a corruption of muslim? Or is there a more interesting story behind it?
Etymologically, the archaic English "mussulman" is derived from the Ottoman Turkish (and earlier Persian) "mosalmun [mosælmɒn] " (look it up here) , which both mean "Muslim".
The modern "muslim" is (obviously) derived directly from the Arabic term.
As to why the Turkish form gained enough traction in English to become its own word, I can only guess, but given that the Ottoman Empire pretty much was "Islam" for a big chunk of history (at least so far as Europe was concerned) it stands to reason that a lot of what was known of Islam would come through Turkish-speaking channels rather than Arabic-speaking channels.
"Muslims" is just the English plural of the Arabic word "Muslim" by appending an "s" just like the plural of most English words. I think you are referring to the Arabic plural form of "Muslim" which, depending on the dialect used, could sounds like "Musilmeen".
There is no corruption here as far as I know. The correct translation of "Muslim" is "peaceful submitter (to God)" or Submitter for short.