We develop an athermal shear-transformation-zone (STZ) theory of plastic deformation in spatially inhomogeneous, amorphous solids. Our ultimate goal is to describe the dynamics of the boundaries of voids or cracks in such systems when they are subjected to remote, time-dependent tractions. The theory is illustrated here for the case of a circular hole in an infinite two-dimensional plate, a highly symmetric situation that allows us to solve much of the problem analytically. In spite of its special symmetry, this example contains many general features of systems in which stress is concentrated near free boundaries and deforms them irreversibly. We depart from conventional treatments of such problems in two ways. First, the STZ analysis allows us to keep track of spatially heterogeneous, internal state variables such as the effective disorder temperature, which determines plastic response to subsequent loading. Second, we subject the system to stress pulses of finite duration, and therefore are able to observe elastoplastic response during both loading and unloading. We compute the final deformations and residual stresses produced by these stress pulses. Looking toward more general applications of these results, we examine the possibility of constructing a boundary-layer theory that might be useful in less symmetric situations.