We study the ultrafast time evolution of cyclobutanone excited to singlet n-->Rydberg state through XMS-CASPT2 nonadiabatic surface-hopping simulations. These dynamics predict relaxation to ground-state with a timescale of 822 +/- 45 fs with minimal involvement of triplets. The major relaxation path to the ground-state involves a three-state degeneracy region and leads to variety of fragmented photoproducts. We simulate the resulting time-resolved electron-diffraction spectra which track the relaxation of the excited state and the formation of various photoproducts in the ground-state.