Is “I medalled in volleyball” a grammatically correct sentence? According to OED, medal is a verb and a noun. I haven't seen any usage of the word as a verb, but I am assuming the above sentence is correct.
An important means of creating new words in English is zero-derivation (aka conversion). This is the process of converting a word from one part of speech to another without any overt morphological process. The use of the noun 'medal' as a verb is an example of this. There are many other examples—new forms are often created in this way, some coined once and never used again, others becoming familiar parts of the language.
It's worth noting that 'medal' as a verb is not a new coining as it was used by Thackeray ('Nil Nisi Bonum', 1860) and Byron (in a letter in 1822); however, both of these uses were transitive whereas the current usage is as an intransitive verb, making it a zero-dervation of a zero-derivation! It seems to come to the public's attention every Olympics and raises the same complaints from people who have only just noticed it (this is the 'recency illusion'). The process of zero-derivation dates back to Old English so this sort of thing has been going on a long time.
Over twenty years ago, I asked the then head of the English Department at the secondary school where we both taught about the acceptability of various noun-to-verb conversions or claimed conversions. He said that a visiting professor at a lecture he had recently attended had declared, "Oh yes - you can verb any noun nowadays."
'She silvered in the 200' and 'She podiumed at the Nationals' were two examples claimed to have been used in an Australian newspaper a few years back. I'm waiting for 'He jugged in the Open.'
Yes, it's grammatically correct, though perhaps not very natural.
The verb medal is a relatively new introduction to the English language though, and is certainly not commonly used where I live (Britain).
See this analysis at Dictionary.com, which gives two accepted uses of medal as a verb:
–verb (used with object)
3. to decorate or honor with a medal.
–verb (used without object)
4. to receive a medal, esp. in a sporting event: He medaled in three of four races.