They shouldn't have left the pad out. Their fault
Braking without the pad in place could, and probably would damage the piston and score the rotor. It would only damage a seal if you did some real heavy braking overheated the piston.
The seals on a Hayes are in grooves in the caliper, you would not need to replace the pistons to replace the seals. Usually the seals only need to be replaced every couple of years to give good piston return(They act like a spring to pull the pistons back away from the rotor)
When you say the brakes "went out", do you mean they started leaking or the lever went to the bar? Leaking is pretty obvious, but lever going to the bar can be air in the system. This is easy they just need to be bled. It can also be a master cylinder failure, where fluid is leaking internally past the seals in the cylinder, but not out onto the ground. If the master cylinder is bad, it is even money to just get a new lever assembly.
The whole thing sounds a little odd to me. If you are going to service a fork(properly) you would take the caliper off, to get it and the line out of the way, so you can pull the legs. It sounds like they just pulled the pads to keep them from getting oiled, pulled the caps, turned the bike upside down to dump the oil and refilled it.
I realy think these guys are culpable. Before you do anything else, try and find a shop that does highend mtb or downhill bikes and have them check over your situation. I believe your present shop is suffering from some competency issues.
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I am in the woods and I have gone crazy.