I let all the air out of a used Fox RP23 shock (which I haven't ridden yet) to remove it from a frame, and a small amount of oil sprayed out along with the air. Is this normal or is my shock in need of repair?
This is normal. There's oil that lubricates the inside of the air chamber and a little will come out when you let the air out. The Fox service manual mentions this and recommends that you put a rag over the schrader valve when relieving the pressure in the shock.