I had the same problem with a rear lockout. I took mine to my LBS and it was repairable, but at a cost of about 50% of the cost of a new, better shock. I just got the shock, since mine was old anyway.

I did try to rebuild my old one for the fun of it, after getting my new shock, and it was harder than I thought it was going to be, and I thought it was going to be pretty hard. In my case I found out that I needed a special tool, and it was another $25 if I wanted to continue to rebuild an old shock I didn't need, so I scrapped it. I can say, even if you're more mechanically inclined than I am, it's not an easy job, and will keep you off your bike for quite some time. Also, be VERY careful with the oil; if you get it on concrete you will never get it off.